Final Project PDF

A PROJECT REPORT ON
AUTOMOBILE INSURANCE IN INDIA
A PROJECT SUBMITTED TO
UNIVERSITY OF MUMBAI FOR PARTIAL COMPLETION THE DEGREE

OF BACHELOR IN COMMERCE (BANKING AND INDURANCE)
SUBMITTED BY
MISS. NEHA RAVINDRA SRIVASTAV

ROLL NO. 1911659
UNDER THE GUIDENCE OF:
Prof. Seema Attarde
PARLE TILAK VIDAYALAYA ASSOCIATIONS
MULUND COLLEGE OF COMMERCE
S.N. ROAD, MULUND (WEST) MUMBAI - 400080
ACADEMIC YEAR: MARCH 2020

A PROJECT REPORT ON
A PROJECT SUBMITTED TO
UNIVERSITY OF MUMBAI FOR PARTIAL COMPLETION THE DEGREE

OF BACHELOR IN COMMERCE (BANKING AND INDURANCE)
SUBMITTED BY
MISS. NEHA RAVINDRA SRIVASTAV

ROLL NO. 1911659
UNDER THE GUIDENCE OF:
Prof. Seema Attarde
PARLE TILAK VIDAYALAYA ASSOCIATIONS
MULUND COLLEGE OF COMMERCE
S.N. ROAD, MULUND (WEST) MUMBAI - 400080
ACADEMIC YEAR: MARCH 2020

DECLARATION BY LEARNER
I the undersigned Miss Neha Ravindra Srivastav hereby, declare that the work
embroidered in this project work titled “Study of Automobile Insurance in India
forms my own contribution to the research work carried out under the guidance of
Prof. Seema Attarde is a result of my own research work and has not been
previously submitted to any other University for any Degree / Diploma to this or any
other University.
Wherever references has been made to previous work of others, it has been clearly
indicated in the bibliography.
I, here buy further declare that all the information of this document have been
obtained and presented in accordance with the academic rule and ethical conduct.
Neha Ravindra Srivastav
Certified by
Prof. Seema Attarde.

ACKNOWLEDGEMENT
To list who all have helped me is difficult because they are so numerous and the death
is so enormous.
I would like to acknowledge the following is being idle stick channels and fresh
dimensions in the completion of this project.
I take this opportunity to thank the University of Mumbai for giving me chance to do
this project.
I would like to thank my principal Mrs Sonali Pendekar for providing the necessary
facilities required for completion of this project.
I take this opportunity to thank our Coordinator Professor Shilpa Thakur for her
moral support and guidance.
I would like to express my sincere gratitude towards my project guide Professor

Seema Attarde whose guidance and care made the project successful.
I would like to thank my college library. For having provided various reference
books and magazine related to my project.
Lastly, I like to thank each and every person who directly and indirectly help me in
the completion of the project especially my parents and peers who supported me
throughout my project.
INDEX
CAHPTER NO. TITLE PAGE NO.

CHAPTER NO. 1 INTRODUCTION 1 – 44
Introduction to Insurance 1
Types of insurance 2
Introduction to automobile insurance in India 5
History 6
Certificate of insurance 8
Breaking down of auto Insurance 8
Motor insurance coverage 9
Claims and wrong claims 11
Do’s and Don’ts for motor inusracne 12
Advantages of automobile insurance 13
Disadvantages of automobile insurance 15
Motor insurance policies 16
Public Policies 20
Problems of Automobile Insurance in India 23
Problems related to Motor Insurance 27
customers
Why should you buy Car Insurance? 28
The leaders in the automobile industry and 30
creating customers delight; a pride of India
Types of car insurance 33
Top 10 Automobile Insurance Companies in 36
India
Future of General insurance 42
Motor vehicle insurance law in India 43
Story of successful automobile company in 44
India.
CHAPTER NO. 2 RESEARCH METHODOLGY 47 – 49
Objectives 47
Sampling 48
Foundation of data 48
Scope of study 49
CHAPTER NO. 3 REVIEW OF LITERATURE 50 – 64
CHAPTER NO. 4 DATA ANALYSIS, INTERPRETATION 65 – 77
AND PRESENTATION
CHAPTER NO. 5 FINDGINGS SUGGESTION AND 78 – 83
CONCLUSION
Findings 78
Suggestion 80
Conclusion 83
CHAPTER 1
INTRODUCTION
INSURANCE:
Insurance is a contract, represented by a policy, in which an individual or

entity receives financial protection or reimbursement against losses from an insurance
company. The company pools clients' risks to make payments more affordable for the
insured.
Insurance policies are used to hedge against the risk of financial losses, both
big and small, that may result from damage to the insured or her property, or from
liability for damage or injury caused to a third party
Understanding How Insurance Works
There is a multitude of different types of insurance policies available, and

virtually any individual or business can find an insurance company willing to insure
them—for a price. The most common types of personal insurance policies are auto,
health, homeowners, and life. Most individuals in the United States have at least one
of these types of insurance, and car insurance is required by law.
Businesses require special types of insurance policies that insure against

specific types of risks faced by a particular business. For example, a fast food
restaurant needs a policy that covers damage or injury that occurs as a result of
cooking with a deep fryer. An auto dealer is not subject to this type of risk but does
require coverage for damage or injury that could occur during test drives.
There are also insurance policies available for very specific needs, such as
kidnap and ransom (K&R), medical malpractice, and professional liability insurance,
also known as errors and omissions insurance.
Any risk that can be quantified can potentially be insured. Specific kinds of
risk that may give rise to claims are known as perils. An insurance policy will set out
in detail which perils are covered by the policy and which are not. Below are non-
1
exhaustive lists of the many different types of insurance that exist. A single policy that
may cover risks in one or more of the categories set out below. For example, vehicle
insurance would typically cover both the property risk (theft or damage to the vehicle)
and the liability risk (legal claims arising from an accident). A home insurance policy
in the United States typically includes coverage for damage to the home and the
owner's belongings, certain legal claims against the owner, and even a small amount
of coverage for medical expenses of guests who are injured on the owner's property.
Business insurance can take a number of different forms, such as the various kinds of
professional liability insurance, also called professional indemnity (PI), which are
discussed below under that name; and the business owner's policy (BOP), which
packages into one policy many of the kinds of coverage that a business owner needs,
in a way analogous to how homeowners' insurance packages the coverages that a
homeowner needs
TYPES OF INSURANCE:-
1. Automobile Insurance:
Auto insurance protects the policyholder against financial loss in the event
of an incident involving a vehicle they own, such as in a traffic collision.
Coverage typically includes:
• Property coverage, for damage to or theft of the car
• Liability coverage, for the legal responsibility to others for bodily injury or
property damage
• Medical coverage, for the cost of treating injuries, rehabilitation and
sometimes lost wages and funeral expenses.
2. Gap Insurance:
Gap insurance covers the excess amount on your auto loan in an instance
where your insurance company does not cover the entire loan. Depending on the
company's specific policies it might or might not cover the deductible as well.
This coverage is marketed for those who put low down payments, have high
interest rates on their loans, and those with 60-month or longer terms. Gap
insurance is typically offered by a finance company when the vehicle owner
purchases their vehicle, but many auto insurance companies offer this coverage to
2
consumers as well.
3. Health Insurance:
Health insurance policies cover the cost of medical treatments. Dental
insurance, like medical insurance, protects policyholders for dental costs. In most
developed countries, all citizens receive some health coverage from their
governments, paid through taxation. In most countries, health insurance is often
part of an employer's benefits.
4. Casualty Insurance :
Casualty insurance insures against accidents, not necessarily tied to
any specific property. It is a broad spectrum of insurance that a number of
other types of insurance could be classified, such as auto, workers
compensation, and some liability insurances.
• Crime insurance is a form of casualty insurance that covers the policyholder

against losses arising from the criminal acts of third parties. For example, a
company can obtain crime insurance to cover losses arising from theft or
embezzlement.
• Terrorism insurance provides protection against any loss or damage caused by
terrorist activities. In the United States in the wake of 9/11, the Terrorism
Risk Insurance Act 2002 (TRIA) set up a federal program providing a
transparent system of shared public and private compensation for insured
losses resulting from acts of terrorism. The program was extended until the
end of 2014 by the Terrorism Risk Insurance Program Reauthorization Act
2007 (TRIPRA).
• Kidnap and ransom insurance is designed to protect individuals and
corporations operating in high-risk areas around the world against the perils of
kidnap, extortion, wrongful detention and hijacking.
• Political risk insurance is a form of casualty insurance that can be taken out by
businesses with operations in countries in which there is a risk that revolution
or other political conditions could result in a loss.
5. Life Insurance :
Life insurance provides a monetary benefit to a decedent's family or other
3
designated beneficiary, and may specifically provide for income to an insured
person's family, burial, funeral and other final expenses. Life insurance policies
often allow the option of having the proceeds paid to the beneficiary either in a
lump sum cash payment or an annuity. In most states, a person cannot purchase a
policy on another person without their knowledge.
Annuities provide a stream of payments and are generally classified as

insurance because they are issued by insurance companies, are regulated as
insurance, and require the same kinds of actuarial and investment management
expertise that life insurance requires. Annuities and pensions that pay a benefit
for life are sometimes regarded as insurance against the possibility that a retiree
will outlive his or her financial resources. In that sense, they are the complement
of life insurance and, from an underwriting perspective, are the mirror image of
life insurance.
Certain life insurance contracts accumulate cash values, which may be

taken by the insured if the policy is surrendered or which may be borrowed
against. Some policies, such as annuities and endowment policies, are financial
instruments to accumulate or liquidate wealth when it is needed.
These are the different types of Insurance in India. And the insurance that is
going to be formulated further is Automobile Insurance in India.
AUTOMOBILE :
MEANING :
Motorized vehicle consisting of four wheels and powered by an internal

engine. Automobiles are used to transport people and items from one location to
another location. After years or various designs, inventors were able to develop a
functional general design that is utilized by major automakers as the foundation of
their designs. Automobiles generally use gasoline to fuel the internal engine, but
technological advances have led to the design of cars that run on electricity and even
water.
4
DEFINITION:
More popularly known as motor insurance, this type of insurance provides

cover for loss or damage to any vehicle like car, two-wheeler or commercial vehicle,
etc.
DESCRIPTION:
This insurance helps mitigate monetary harms due to accidents causing damage
to the vehicles. The premium amounts that are payable by the person securing
insurance for his vehicle depends on various factors like insured declared value, type
of vehicle, age of vehicle, fuel type, age of the insured, etc.
Motor Vehicle insurance (also known as, car insurance, or motor insurance) is
insurance purchased for cars, trucks, motorcycles, and other road vehicles. A motor
insurance policy is generally a combined insurance which insures the damage to the
motor vehicle and its accessories, liability for damage to property, death of, or injury
to the assured himself or spouse and it also insures the motor vehicle against the risk of
liability for injury to, or the death of third parties caused by the drivers negligence. In
some jurisdictions coverage for injuries to persons riding in the insured vehicle is
available without regard to fault in the auto accident (No Fault Auto Insurance).Auto
Insurance in India deals with the insurance covers for the loss or damage caused to the
automobile or its parts due to natural and man-made calamities. It provides accident
cover for individual owners of the vehicle while driving and also for passengers and
third party legal liability.
Vehicle insurance (also known as car insurance, Motor vehicle insurance law
in India is governed by the Motor Vehicles Act, Insurance Act and aspects of insurance
contracts governed by the Indian Contract Act, Transfer of Property Act and a few
others. Motor vehicle insurance is the insurance coverage of the risk of third party
arising out the use of motor vehicle and also for covering the risk of damage caused to
the vehicle. Taking insurance policy for coverage of certain risks are made
compulsory and coverage for other risks are optional at the instance of the owner.
Accordingly, motor vehicle insurance policies can be divided into two, namely,
5
compulsory insurance policy (Act policy) and comprehensive policy. insurance, or
auto insurance) is insurance for cars, trucks, motorcycles, and other road vehicles. Its
primary use is to provide financial protection against physical damage or bodily injury
resulting from traffic collisions and against liability that could also arise from incidents
in a vehicle. Vehicle insurance may additionally offer financial protection against theft
of the vehicle, and against damage to the vehicles sustained from events other than
traffic collisions, such as keying, weather or natural disasters, and damage sustained by
colliding with stationary objects. The specific terms of vehicle insurance vary with
legal regulations in each region.
HISTORY
Widespread use of the motor car began after the First World War in urban
areas. Cars were relatively fast and dangerous by that stage, yet there was still no
compulsory form of car insurance anywhere in the world. This meant that injured
victims would seldom get any compensation in an accident, and drivers often faced
considerable costs for damage to their car and property.
A compulsory car insurance scheme was first introduced in the United

Kingdom with the Road Traffic Act 1930. This ensured that all vehicle owners and
drivers had to be insured for their liability for injury or death to third parties whilst
their vehicle was being used on a public road. Germany enacted similar legislation in
1939 called the "Act on the Implementation of Compulsory Insurance for Motor
Vehicle Owners." The Indian general insurance sector is growing at a healthy 17% a
year. Motor insurance is the biggest chunk, accounting for 49% of the gross direct
premiums earned (FY16), at $6.5 billion. The Motor Vehicles Act, from 1988,
mandates that every vehicle should be compulsorily insured for third-party risks. With
the expected growth in automobile sales (6% CAGR in the past 5 years), motor
insurance sales are also expected to grow. These numbers are set to rise owing to the
changing consumer profile, as well.
The legal mandate demanding the purchase of a third-party liability insurance

policy compelled Indians to opt for motor insurance. It was a box that was needed to
be ticked off, nothing more. However, the mandate did acquaint people with the
philosophy of motor insurance. They started looking at the financial benefits
6
associated with the policy, and the insurers capitalized on this window. Innovative
offers and alluring discounts encouraged vehicle owners to look at motor insurance in
a holistic manner.
Recent developments opened the gates wide, by allowing 49% foreign direct
investment (FDI). The investment increased capital inflow, leveled the playing field
and fostered better market penetration. Insurers now concentrate on offering
innovative products, providing better administrative services and ensuring hassle-free
claims.
7
Certificate of Insurance :
• The Motor Vehicles Act, 1988 provides that the motor insurance policy shall be of
no effect
• unless and until a certificate of insurance in the form prescribed under the Rules of
the Act,
• is issued. The Certificate of Insurance is considered as the only evidence of a valid
insurance
• as required by the Motor Vehicles Act, 1988 and acceptable to the Road Transport
Authority RTA .
Auto insurance is a policy purchased by vehicle owners to mitigate costs associated with
getting into an auto accident. Instead of paying out of pocket for auto accidents, people pay
annual premiums to an auto insurance company; the company then pays all or most of the
costs associated with an auto accident or other vehicle damage.
Breaking Down Auto Insurance
Auto insurance premiums vary depending on age, gender, years of driving

experience, accident and moving violation history, and other factors. Most states
mandate that all vehicle owners purchase a minimum amount of auto insurance, but
many people purchase additional insurance to protect themselves further. Poor driving
record or the desire for complete coverage will lead to higher premiums. However,
you can reduce your premiums by agreeing to take on more risk, which means
increasing your deductible. In exchange for paying a premium, the insurance company
agrees to pay your losses as outlined in your policy. Coverages include:
• Property – damage to or theft of your car

• Liability – legal responsibility to others for bodily injury or property damage
• Medical – costs of treating injuries, rehabilitation and sometimes lost wages and
funeral expenses
Policy terms are usually six- or 12-month timeframes and are renewable. An insurer will
notify a customer when it’s time to renew the policy and pay another premium. Auto
insurance requirements vary from state to state. If someone is financing a car, the lender may
stipulate requirements. Nearly every state requires car owners to carry:
8
1. Bodily injury liability – covers costs associated with injuries or death that you or
another driver causes while driving your car.
2. Property damage liability – reimburses others for damage that you or another
driver operating your car causes to another vehicle or other property.
Many states also require:
• Medical payments or personal injury protection (PIP) – Provides

reimbursement for medical expenses for injuries to you or your passengers. It
will also cover lost wages and other related expenses.
• Uninsured motorist coverage – Reimburses you when an accident is caused by
a driver who does not have auto insurance.
• Mandatory Third Party Insurance.
As per the Motor Vehicles Act, 1988, it is mandatory for every owner of a
vehicle plying on public roads, to take an insurance policy, to cover the amount, which
the owner becomes legally liable to pay as damages to third parties as a result of
accidental death, bodily injury or damage to property. A Certificate of Insurance must
be carried in the vehicle as a proof of such insurance.
Motor insurance coverage
Motor Insurance covers all types of vehicles plying on public roads such as:
Scooters and motorcycles, Private cars, All types of commercial vehicles: Goods
carrying and passenger carrying, Miscellaneous type of vehicles e.g. cranes, Motor
Trade (Vehicles in Showrooms and gareges.
1. Basis of Sum Insured

The Insured’s Declared Value (IDV) of the vehicle will be deemed to be
the SUM INSURED for the purpose of this policy which is fixed at the
commencement of each policy period for the insured vehicle.
2. Insured’s Declared Value (IDV)

The IDV of the vehicle is generally fixed on the basis of manufacturer’s
listed selling price of the brand and model at the commencement of insurance
/renewal and is also adjusted for depreciation as prescribed in the IRDA
9
regulations. Manufacturer's listed selling price willinclude local duties / taxes
excluding registration and insurance. The IDV of the accessories fitted to the
vehicle but not included in the manufacturer’s listed selling price of the vehicle
is also likewise to be fixed.
3. Type of Motor Insurance

Motor Insurance includes Private Cars, Motorized Two Wheelers and
Commercial Vehicles excluding vehicles running on rails. Motor insurance gives
protection to the vehicle owner against (i). damages to his/her vehicle and (ii).
pays for any Third Party Liability determined as per law against the owner of the
vehicle.
4. Period of Motor Insurance Policy

A motor policy is usually valid for a period of one year and has to be
renewed before the due date. Unless specifically stated otherwise, premiums
quoted in the Schedules under various Sections of the India Motor Tariff are the
premiums payable on policies issued or renewed for a period of twelve months.
5. Cover Notes
Cover Notes insuring Motor Vehicles are to be issued only in Form 52 in

terms of Rule 142 Sub-Rule (1) of the Central Motor Vehicles Rules 1989. In
terms of Rule 142, SubRule (2) of Central Motor Vehicles Rules 1989, a Cover
Note shall be valid for a period of sixty days from the date of its issue and the
insurer shall issue a policy of insurance before the date of expiry of the Cover
Note.
6. Determining the rate of premium

For the purpose of applying premium rate, the place where the vehicle is
registered is reckoned (not the place where the vehicle is used).Factors that
determine the premium amount: Make and Model of the Vehicle, Year of
Manufacture, Place of Registration, Current Showroom price of the vehicle,
Whether Client is Individual or Corporate, Cubic capacity, Geographical zone,
IDV, Add on Covers.
10
7. Documents to be kept in the vehicle while plying in public places
The following documents are to be kept in the vehicle while plying in
public places: Certificate of Insurance, Xerox copy of Registration Certificate,
Pollution Under Control Certificate, Photocopy of Driving Licence of person
who is driving the vehicle.
8. Double Insurance
When two policies are in existence on the same vehicle with identical
cover, one of the policies may be cancelled. Where one of the policies
commences at a date later than the other policy, the policy commencing later is
to be cancelled by the insurer concerned.
9. No claim bonus
No claim bonus recognizes the factor of moral hazard in the insured. It
rewards the insured for not lodging claims either by adopting better driving skills
as in motor insurance. An insured becomes entitled to NCB only at the renewal
of a policy after the expiry of the full duration of 12 months.NCB is given to the
insured and not to the insured vehicle. As per current norms in India, it ranges
from 20% on the Own Damage premium (and not on Liability premium) and
progressively increases to a maximum of 50%.
Claims and wrong claims

A claim under a motor insurance policy could be for personal injury or
property damagerelated to someone else (i.e. a third party in this context) or for
damage to your own, insured, vehicle (i.e an own damage claim) under a package or a
comprehensive policy.
In case of accidental damage to the vehicle, in case of theft of the vehicle, in

case of liability claim, one needs to follow the prescribed claim procedure. Hence as
soon as one receives the policy document, read about the procedures and
documentation requirements for An insured may not deliberately bring about a loss
but once a loss occurs, he would attempt to demand unreasonably high amount of
compensation, in total disregard of the principle of indemnity. Such claims may be
called as wrong claims.
11
Deductibles
A deductible is the amount of money that you are required to pay out of
pocket before your expenses are paid on a claim for e.g. if the deductible is 10% and
you file a claim of 9000 rupees, you have to pay 900 rupees. Hence one has to choose
the policy carefully depending on the deductible amount.
Dos and Don'ts for Motor Insurance
• Do’s: Buy motor insurance policy after proper comparison through a genuine
licensed agent or broker and not through anyone. Ask for an identity card or
license of the agent/broker, Check if the company selling the policy is registered
with IRDA, Fill the proposal form yourself even if the vehicle dealer is arranging
for the insurance in order to avoid misrepresentation of information, Fill the
proposal form carefully and factually and thoroughly, Keep a copy of the
completed proposal for your records, Read the policy brochure/ prospectus
carefully to know what is covered and what is not, Ask for information about add-
on covers that may be available and choose what suits you, Give documents such
as RC Book, Permit and Driving License to the insurance company for
verification, Ensure that you keep these documents updated from the authorities
concerned, You can also buy policies from the company
• Directly Don’ts :Don’t let anyone else fill your proposal form, Don’t leave any
column blank, Don’t forget to renew your policy without any break, Don’t forget
to ask for the correct procedure when you buy a used car that already has
insurance, Don’t make false declarations aboutthe actual use of the vehicle you are
insuring.
Objectives:
1. To create awareness of the availability of automobile insurance.

2. To explain how it is easy to get an automobile insurance.
3. To complete the project as a curriculum activity.
4. To reveal the importance of automobile insurance.
12
Advantage of Automobile Insurance:
Car Insurance Benefits Why to Buy Car Insurance?
The answer is simple. Car Insurance is mandatory by law. Driving around

without valid car insurance is illegal in India. In case of death or bodily injury to a
third party or any damage to its car, the car insurance policy provides compensation
of up to Rs 1 lakh. Such type of vehicle insurance is known as the third party insurance
and it protects not only you but also other people or family members who may be
riding / driving you car.
Comprehensive car insurance protects your car from any man made or natural
calamities like terrorist attacks, theft, riots, earth quake, cyclone, hurricane etc in
addition to third party’s claims/damages. At times car insurance can be confusing and
difficult to understand. There are certain guidelines that should be followed by the Car
Insurance buyers while choosing the policy. Car insurance acts like a great friend at
the time of crisis. It covers the losses made in an accident and thus saves you from
paying out the huge sum from your pocket.
All the states in India require a minimum amount of insurance. Car insurance
can help offset the loss of huge sum in the following manner:
• Provides benefits to survivors when an accident results in death.

• It covers lawsuits, including legal fees brought against you as the result of an
accident.
• Covers the bills of vehicle repairs due to damage caused in an accident.
• Covers damage caused by other than an accident for example, theft, fire, etc.
• Additional discounts: Car insurance policies allow premium discounts for theft or
for owning more than one policy with the same insurer. It also provides added
advantage to extend coverage to others driving your car with your permission.
• No Claim Bonus: If you do not make a claim during the policy period, a No Claim
Bonus is offered on renewals provided you fulfill certain terms and conditions.
• Due to huge traffic complications, car accidents are often in India. As per national
crime records bureau, there are 4,96,000 traffic accidents in 2015. These statistics
reveal that how we are prone to accidents. Accidental claims are costly to bear by
individual solely, the best way to avoid a car and personal damage expenses are to get car
13
insurance policy. An insurance policy is also helpful to claim for medical expenses too.
Below are the financial advantages of having a car insurance policy online
• Assured for financial liability

Are you sound to pay for huge accidental damages? If the answer is no,
then choosing the best car insurance policy is the right option to get rid of huge
colossal damage costs
• Assured of repairs and replacement

Car insurance authority analyses the severity of damage and concludes
whether to repair or replace the spare parts. Car insurance policy saves your
vehicle for these denoted car damages. This rainy season might cause more damage
to your vehicle due to bumpy and patchy roads. This damaged road impacts the
mechanical parts of your vehicle.
• Legal Requirement
Car owner needs a liability assurance for their new owned car, having a
right insurance policy protects you from legal clause.
• Assured for medical claims

In case of severe damage to driver or passenger, an individual cannot bear
the heavy medical expenses. Having an insurance policy assures the medical
expenses are covered to support financial expenses.
• Protects driver and passenger liability

If there is any damage to driver and passengers in case of accidents, your
insurance policy covers the damage expenses.Now you can drive on roads without
any stress due to perks involved in the car insurance policy. Never be too reckless
driving in back-up with an insurance policy, there are numerous advantages of car
insurance premium. Know how insurance helps you from unforeseen damages.
14
Disadvantage of Automobile Insurance:
• People instinctively buy the car insurance policy assuming insurance protects your
vehicle. But there are disadvantages of car insurance policy when you opt for the
best car insurance policy online. Insurance representatives hide the specific
clauses, this, in turn, reflects you at the time of claim settlement.
• Primary and the major disadvantage of car insurance is your policy not covers the
entire vehicle. Only the specific parts of the car are under damage coverage,
policyholder needs to verify hidden clauses in the document keenly before buying
the policy.
• Most of the insurance companies take a time frame to settle the claim amount, this
is the problem most of the policyholders are facing.
• Opt for cashless claim settlement for hassle-free claim settlement.
• Motor insurance plan is mandatory to protect your vehicle from financial burden in
case of any damages. Be careful in choosing the auto insurance which maximizes
the benefits in terms of optimum claim settlement. Check for the ratio of fair claim
settlement for every insurance company and get the best insurance policy.
15
Motor Insurance Policies
Motor insurance is one of the primary financial protection tools that you
should have in your possession. With the ever-increasing incidence of accidents in the
country and the strict regulations laid out by the government, it is inevitable that you
buy adequate insurance protection for your vehicle.
There are various types of motor insurance policies available in the country.
You should ideally assess your insurance requirements and decide on a policy that
safeguards you in the most optimum way.
How To Choose The Right Motor Insurance Coverage?

Motor insurance plans are classified into different categories based on the
extent of coverage offered and the type of vehicle for which the insurance is
sought.Amount of insurance coverage Motor insurance plans can be divided into three
types based on the amount of insurance protection offered:
Third-party liability insurance –

This is the most basic form of car insurance and hence, it is also the cheapest.
This insurance scheme is also referred to as liability-only insurance or act-only plan.
The Motor Vehicles Act, 1988, mandates that all car owners are in possession of this
insurance policy for the protection of their vehicles. In case you drive a car without a
minimum of third-party liability insurance cover, you are liable to face penalties. The
coverage offered by this insurance plan includes protection to a third party for
incidents such as injuries/death and property damage caused in an accident involving
the insured vehicle. It should be noted that the third-party liability insurance cover
does not offer own-damage cover, i.e., coverage for the insured vehicle or the
ownerdriver. Some insurance companies offer a personal accident cover for the
ownerdriver along with the third-party liability insurance plan. Although there is no
upper limit on the amount a third party can receive as compensation for
death/disabilities, there is a cap of Rs.7.5 lakh on the maximum amount offered for
third-party property damages. However, the final claim amount is decided by the
court.
16
Comprehensive motor insurance –
Often referred to as a package policy by some insurers, this plan provides
more exhaustive insurance protection, as it encompasses third-party liability coverage
and own-damage cover. The detailed coverage of the comprehensive motor insurance
plan is as described below:
1. Own-damage cover - This includes protection for the insured vehicle from the
following events:
• Accidental damages
• Damages while in transit via rail, road, waterways, lift, etc.
• Damages caused by natural calamities, such as earthquakes, floods,
hurricanes, etc.
• Damages from man-made disasters such as strikes, riots, vandalism, etc.
• Theft of the insured vehicle

Additionally, the comprehensive motor insurance plan offers personal accident cover
to the owner-driver.
2. Third-party liability cover - This part of the comprehensive motor insurance

policy protects the policyholder from legal liabilities to a third party from
accidental injuries/death or property damage. The maximum amount of coverage
under this insurance for injuries/death is unlimited. However, there is a cap of
Rs.7.5 lakh on coverage for third-party property damage. The final claim payout
for property damage is decided by the court.
17
Motor insurance add-on plans –
Apart from the comprehensive and third-party liability insurance plans
detailed above, most motor insurance companies also offer add-on covers that can
enhance the coverage of the base policy. These riders should be purchased from the
same insurance provider by paying an additional amount. Some of these add-on plans
are as described below:
1. Zero depreciation cover - This is a popular motor insurance add-on plan that
offers significant savings at the time of a claim. It is also referred to as nil
depreciation cover or bumper to bumper policy. Consider that your vehicle is
insured with a comprehensive motor insurance policy. At the time of a claim, you
will still have to bear the expenses pertaining to depreciation of the vehicle parts
and excesses. However, if your comprehensive motor insurance plan was
reinforced with a nil depreciation cover, the insurer would bear the expenses for
the depreciation of vehicle parts.
2. Engine protect cover –A comprehensive motor insurance plan does not protect
the vehicle from mechanical or electrical damages to the engine. Buying an engine
protect cover offers your engine the much-needed protection, especially if you
reside in an area prone to waterlogging.
3. Return to Invoice (RTI) cover - This add-on plan protects your vehicle from
total loss expenses. In the event of a total loss scenario such as a car theft, it
provides you the actual invoice value of the vehicle, without accounting for its
depreciation with age.
4. Loss of personal belongings cover - Loss of expensive electronic equipment,
laptops, etc. kept in the insured vehicle is offered coverage under this add-on
insurance plan.
5. No Claim Bonus (NCB) protect cover - No Claim Bonus is a significant bonus
offered by insurers to drivers who refrain from raising motor insurance claims in a
policy year. You can preserve this bonus even after raising a claim if your vehicle
insurance has an NCB protect cover.
6. Personal accident cover for the passengers - The comprehensive car insurance
policy can be enhanced to offer protection for the passengers by opting for this
rider.
18
7. Key replacement cover - Under this cover, the insurance company reimburses
the cost of replacement of the vehicle keys if these were lost or misplaced.
8. Roadside assistance cover - This add-on cover offers 24/7 protection to the
policyholder from incidents such as flat tyre, fuel depletion, requirement for
expert scrutiny, etc.
9. Consumables cover - Components that are used in a vehicle such as nuts and
bolts, screen washers, engine oil, etc. are collectively referred to as consumables.
The insurance company does not bear the cost of these components at the time of a
claim. However, if your vehicle insurance was equipped with this rider, you will
receive coverage for consumables.
10. Daily allowance cover - This add-on cover offers reimbursement for the expenses
involved in hiring an alternate vehicle when the insured automobile is undergoing
repairs at a garage.
11. Type of vehicle –
Motor insurance policies can be classified into two types based on the vehicle for
which it is purchased: This coverage offers insurance protection for all types of
cars and SUVs
 Two-wheeler insurance - This insurance plan is availed to protect a
twowheeler from eventualities such as accidents, natural disasters, theft,
manmade calamities, etc.
Apart from the above, motor insurance is also segregated based on the purpose
of use of the vehicle. So, you can opt to buy a private motor insurance policy for your
personal vehicle. Along the same lines, a commercial motor insurance plan will offer
insurance coverage for the vehicle you will be using for business purposes.
In conclusion, motor insurance in India can be of several types. It is up to you

to understand your unique insurance needs and decide on a policy that suits you best.
It is also advisable to buy motor insurance online for the security and convenience
that it offers.
19
PUBLIC POLICIES :
In many jurisdictions, it is compulsory to have vehicle insurance before using
or keeping a motor vehicle on public roads. Most jurisdictions relate insurance to both
the car and the driver; however, the degree of each varies greatly. Several jurisdictions
have experimented with a "pay-as-you-drive" insurance plan which utilizes either a
tracking device in the vehicle or vehicle diagnostics. This would address issues of
uninsured motorists by providing additional options and also charge based on the
miles (kilometers) driven, which could theoretically increase the efficiency of the
insurance, through streamlined collection.
Auto insurance in India deals with the insurance covers for the loss or damage
caused to the automobile or its parts due to natural and man-made calamities. It
provides accident cover for individual owners of the vehicle while driving and also
for passengers and third party legal liability. There are certain general insurance
companies who also offer online insurance service for the vehicle.
Auto insurance in India is a compulsory requirement for all new vehicles used
whether for commercial or personal use. The insurance companies have tie-ups with
leading automobile manufacturers. They offer their customers instant auto quotes.
Auto premium is determined by a number of factors and the amount of premium
increases with the rise in the price of the vehicle. The claims of the auto insurance in
India can be accidental, theft claims or third party claims. Certain documents are
required for claiming auto insurance in India, like duly signed claim form, RC copy of
the vehicle, driving license copy, FIR copy, original estimate and policy copy.
There are different types of auto insurance in India:
Private Car Insurance – Private Car Insurance is the fastest growing sector in India
as it is compulsory for all the new cars. The amount of premium depends on the make
and value of the car, state where the car is registered and the year of manufacture.
This amount can be reduced by asking the insurer for No Claim Bonus (NCB) if no
claim is made for insurance in previous year.[16]
Two Wheeler Insurance – The Two Wheeler Insurance in India covers accidental
insurance for the drivers of the vehicle. The amount of premium depends on the
current showroom price multiplied by the depreciation rate fixed by the Tariff
20
Advisory Committee at the beginning of a policy period.
Commercial Vehicle Insurance – Commercial Vehicle Insurance in India provides

cover for all the vehicles which are not used for personal purposes like trucks and
HMVs. The amount of premium depends on the showroom price of the vehicle at the
commencement of the insurance period, make of the vehicle and the place of
registration of the vehicle. The auto insurance
generally includes:
• Loss or damage by accident, fire, lightning, self ignition, external explosion,

burglary, housebreaking or theft, malicious act
• Liability for third party injury/death, third party property and liability to paid
driver
• On payment of appropriate additional premium, loss/damage to
electrical/electronic accessories.
The auto insurance does not include:
1. Consequential loss, depreciation, mechanical and electrical breakdown, failure

or breakage
2. When vehicle is used outside the geographical area
3. War or nuclear perils and drunken driving
Third-party Insurance Edit

This cover is mandatory in India under the Motor Vehicles Act, 1988. This
cover cannot be used for personal damages. This is offered at low premiums and
allows for third party claims under “no fault liability. The premium is calculated
through the rates provided by the Tariff Advisory Committee. This is branch of the
IRDA (Insurance Regulatory and Development Authority of India). It covers bodily
injury/accidental death and property damage
Auto repair insurance is an extension of car insurance available in all 50 of the

United States that covers the natural wear and tear on a vehicle, independent of
damages related to a car accident. Some drivers opt to buy the insurance as a means of
protection against costly breakdowns unrelated to an accident. In contrast to more
21
standard and basic coverages such as comprehensive and collision insurance, auto
repair insurance does not cover a vehicle when it is damaged in a collision, during a
natural disaster or at the hands of vandals. For many it is an attractive option for
protection after the warranties on their cars expire.
Providers can also offer sub-divisions of auto repair insurance. There is standard
repair insurance which covers the wear and tear of vehicles, and naturally occurring
breakdowns. Some companies will only offer mechanical breakdown insurance,
which only covers repairs necessary when breakable parts need to be fixed or replaced.
These parts include transmissions, oil pumps, pistons, timing gears, flywheels, valves,
axles and joints.
In several countries insurance companies offer direct repair programs (DRP)

so that their customers have easy access to a recommended car body repair shop.
Some also offer one-stop shopping where a damaged car can get dropped off and an
adjuster handles the claim, the car is fixed and often a replacement rental car is
provided. When repairing the vehicle the car body repair shop is obliged to follow the
instructions regarding the choice of original equipment manufacturer (OEM), original
equipment supplier parts (OES), Matching Quality spare parts (MQ) and generic
replacement parts. Both DRPs and non OEM parts help to keep costs down and keep
insurance prices competitive. AIRC (International Car body repair Association)
General Secretary Karel Bukholczer made clear that DRP's have had big impact on
car body repair shops.
22
Problems of Automobile Insurance in India :-
1. Motor tariff rates –
The problem of motor vehicle insurance companies are that they were
facing continuously adverse claim experience through its statutory legal liability
section. A large amount of motor vehicle insurance was taken but commercial
vehicles owners have heavy incidence of claims for several years. The
commercial motor vehicles owners were not in the favors of increasing motor
tariff rate and most of the times they oppose this through stikes. Several measures
were taken by various committee to solve the issue related to motor tariff rate but
nothing yet to be done.
2. Invalid motor insurance-

The another challenge that motor insurance sector facing is invalid motor
insurance. Several vehicles that ply on Indian roads do not Carry a valid
insurance (reasonable estimates put it anywhere around 40 % ofthem) is one that
needs to be taken seriously and tackled at the right places. This alone could be a
major factor for the Motor portfolio to bleed year after year.Changing customer
needs and preferences- In this scenario nonlife insurance companies are
witnessing changing customer needs and preferences in motor insurance policies,
which is their largest business segment. Now customers no longer want plain
vanilla insurance policies that just cover their car, truck or twowheeler, but are
increasingly asking for service based insurance coverage and insurance
companies are lacking in fullfilling this requirement.
3. Underinsurance-
According to estimates, around 40 per cent cars and 70 per cent two
wheelers are underinsured. The traditional distribution channels have failed to
spread the insurance beyond a point. Since the premium of an insurance policy
for a two-wheeler is less than Rs1,000, agents do not consider it a lucrative
business due to lower commissions.
4. Limited data for pricing-

The other challenge faced by insurers is that there is not enough data to
help them in pricing a risk. According to a report published in 2012 by the Road
23
Transport Authority, the driver‘s fault account for a whopping 77.5 % of the total
road accidents. Yet the pricing is based more on the year ofmanufacture of the
vehicle, engine capacity, price and the zone in which the vehicle is bought and
less on the age, occupation and credit score of the driver and usage of the vehicle.
5. Lack of awareness-
In today’s world the problem faced by motor insurance business markets
is not a shortage of goods (insurance products) but a shortage ofcustomers.This
arises due to lack of awareness and understanding on the customer’s side.
Insurance is ―PEOPLE‘S BUSINESS‖. Insurers are dealing with people who are
their policyholders, claimants, intermediaries, beneficiaries andeven employees.
Insurance is sold and seldom brought. Insurance selling is complex & difficult.
Motor insurance customers are aware about the basic coverage of the policy but
they are unaware about the claim, excess and bonus related to policy.
6. Negligent motorists-
In India many cases are there where innocent persons who are injured in
auto accidents are unable to recover financial damages from the negligent
motorists who injured them. Although accident victims may have bodily injuries
or suffer property damage, they may recover nothing or receive less than full
indemnification.
7. Immature surveyors and loss assessors-

Motor accident claims are the most common amongst different types of
claims, arriving out of various policies; but unfortunately, they are being handled
by immature surveyors and loss assessors. These motor claims are receiving the
least attention of the industry, and as a result everybody is facing a lot of
problems while processing such claims. Probably, it is the only subject, out of
many branches of the general insurance industry which does not have any
guideline whatsoever.
8. Lack of basic technical knowledge-

Most of the staff members processing the claims and scrutinizing the
survey report do not have any basic technical knowledge on the structure of
vehicles, in the absence of which they blindly believe whatever is stated in the
survey report.
24
9. Excessive cost and payouts-
Excessive cost and continuous payouts trends are the factor that creates
problem for Indian public sector motor insurance companies.Their cost exceeds
their collected premium
10. Low profitability-

Another challenge is low profitability in the motor insurance segment.
Factors which were responsible for low profitability were-
• Cash flow undertwriting,
• Lack of control on underwriters high acquisition cost and soaring management
• Expenses.
• Growing automobiles theft due to high repair and replacement schedule
• lenient attitudes of the court towards insured
• Fraudulent claims.
• Inadequate database to enable actuarial calculations for risk assessment and
rating of different groups of vehicles,
• No scientific rating (rates are not based on risk exposure).
11. Unethical Practice-

In India it was seen that sometimes motor insurance policyholders
adopting fraudulent practices by making fake accidents claims for earning profit
out of it, which is illegal in Indian Law and that is the major problem of Indian
motor industry.
12. Excessive Dependence on surveyors-

Another problem under motor insurance industry is too much of
dependence on independent surveyors. The reason behind is lack of technical
knowledge of the staff.
13. Independent assessor-

In Indian motor insurance industry an independent assessor charges
higher amount of remuneration for their service which is a costlier affair for the
company and a problem for the motor insurance industry. Because their expenses
are more as compared to premium collection.
25
14. Coverage-
The another challenge in front of motor insurance companies is coverage,
here coverage means coverage of insurance in a territory. Several vehicles ply on
special permits to cover large territory. Five state composite permit, seven state
national permit, zonal permit etc. enable the vehicles to cover very long
distances. This type of change in operation makes control of operation a difficult
task and this introduces a new dimension of risk. Contract carriage operating
under All India permit also form a different class of risk since the operation takes
the vehicles to far off places where the insured cannot exercise proper control.
15. Change in psychology of the operators-

The tendency of the insureds is to obtain the maximum benefit when a
claim occurs.They try to cover up various kinds of losses they suffer when an
accident occurs. The motor policies indemnifies against loss or damage suffered
on account of accidents caused by stated contingencies: but the amount payable
as claim is circumscribed by limitations, exclusions and policy conditions.
16. Renewal-
The real problem is the renewal of the policies from the second year
onwards when the vehicle owner fails to take it seriously. Even among those that
go to renew their policies, there is a high incidence of opting only for the
mandated third party liability, thereby defeating the very objective of insurance.
Reasons for not renewing are ignorance, carelessness, high premium amount and
busy time schedule.
17. Breach of Utmost good faith-

The doctrine of utmost good faith imposes a legal obligation on the
proposer to disclose all material facts in the proposal form; the material vehicular
details- type, year of manufacture,make, engine number and capacity,chassis
number theft proneness of vehicle,etc.; the geographical area of use; the driving
history like driver‘s age, qualification, physical conditions, traffic conviction,
past loss experience, etc. In many cases policyholders breach this principle by
misrepresents / suppresses facts in that case the insurer may be placed under an
unfavorable position where approriate rates may not be applied.
26
Problems Related To Motor Insurance Customers
1. Terms and conditions-

In many cases policyholders are not very clear or do not have proper
information about their motor insurance policy terms and conditions. The reason
behind it was complicated / confused policy wordings, especially to the
policyholders belonging to the rural area due to illeteracy, unfamiliar with english
language etc.
2. Lenthy Process-
In Indian motor insurance industry the problem that customers are facing
in relation to claim settlement is lengthy process due to legal formalities,
mismanagement of the company and inefficient staff specially in public sector.
3. High premium charges-
Another challenge that policyholders are facing in this time are higher
premium charged by the insurance companies. Customer think that they are
paying more premium in comparison to the sum assured amount.
4. Term-
Most of the customers wanted long term motor insurance policy rather
taking one year policy specially in public sector motor insurances companies.
Coverage Level: Vehicle insurance can cover some or all of the following items:
• The insured party (medical payments)

• Property damage caused by the insured
• The insured vehicle (physical damage)
• Third parties (car and people, property damage and bodily injury)
• Third party, fire and theft
• In some jurisdictions coverage for injuries to persons riding in the insured vehicle is
available without regard to fault in the auto accident (No Fault Auto Insurance)
• The cost to rent a vehicle if yours is damaged.
• The cost to tow your vehicle to a repair facility.
• Accidents involving uninsured motorists.
27
Why Is Car Insurance Mandatory In India?
From the time car sales observed a growth in the country, it was apparent that
there would be crashes. These crashes could cause damages that the person at fault
may not be able to pay for. So the underlying necessity of buying car insurance at the
time of purchase of a car seemed to make complete sense.
Why Should You Buy Car Insurance?
As the Indian economy grew, the disposable income in the hands of the
common man saw an increase. This, coupled with the availability of car financing, has
made it easy to own a car, sometimes even more than one in a family. After all, having
your own mode of transportation is more convenient than relying on public transport.
When you buy a car, it is necessary that you buy car insurance as well. The Motor
Vehicles Act, 1988, mandates this due to the following reasons:
• It reduces your liability - Buying third-party motor insurance is lawfully

necessitated for all vehicle owners in India. Third-party liability insurance
protects the car owner from the following incidents:
• It covers him/her against legal liabilities to a third-party in an accident.
• Third-party injuries/death is covered under this insurance plan.
• Damage to third-party property is offered coverage as well.
• This insurance plan, hence, pays for all the damages caused by the at-fault driver
in an accident and saves him/her from legal repercussions of the incident.
• It could pay for your hospitalisation - Some car insurance companies in India
offer personal accident cover for the owner-driver along with the third-party
liability insurance plan. This is a very useful insurance cover as it pays for minor
or serious injuries that the car owner suffers in an accident. If there is a
hospitalisation involved, he/she does not have to pay for the expenses from
his/her own pocket. The motor insurance company will make the necessary
payments. In case the car owner succumbs to injuries, his/her family will be
compensated with a substantial amount to help them financially cope with the
tragedy.
28
Comprehensive Car Insurance
Although it is not mandated to buy a comprehensive car insurance policy, it is
advisable to do so. The coverage offered by a comprehensive plan includes the
following:
• Third-party liability cover - This is similar to the coverage offered by a basic

third-party liability standalone policy that has been explained above.
• Own-damage cover - One of the most significant features of a comprehensive
car insurance plan is the own-damage cover that protects the insured vehicle
from damages. The vehicle is protected from accidental damages, natural
calamities, man-made disasters, in-transit damages, etc. Additionally, the
owner-driver of the insured vehicle is offered personal accident cover that
protects him/her from accidental injuries or death.
It should be noted that a comprehensive car insurance policy costs less when
bought online. From the insurer’s perspective, the low operating cost for
online policy sales is passed on to the customer in the form of discounts.
Moreover, it is easier to renew an online insurance policy with limited
involvement of paperwork.
29
“THE LEADERS IN THE AUTOMOBILE INDUSTRY AND
CREATING CUSTOMERS DELIGHT; A PRIDE OF INDIA”
We can describe maruti Suzuki as :

MARUTI SUZUKI. ONCE A LEADER, ALWAYS A LEADER.
The objective of Maruti Udyog limited are :

1. Modernization of Indian automobile industry.
2. Production of fuel efficient vehicles to conserve scares resources.
3. production of large number of motor vehicles, which was necessary for
economic growth.
MILESTONES:
Maruti Udyoglimited was incorporated under the provision of Indian
companies act, 1956 in the year 1981. licence and joint venture agreement signed
between maruti udyog limited. And Suzuki motor corporation of Japan. in the year
1983 the company launch maruti 800 into market. It was the India’s first affordable
car. The production of this car was started under the joint venture between the two.
This what's the small car launch. Then it became the great success till today.
Nobody is able to achieve success as the maruti 800. Then came the launch of multi
utility vehicle that is maruti Omni full stop it was also a great success it was used for
carrying small goods and also then for the used as an ambulance. In the year 1985
maruti Gypsy came into market. This car was mostly used by police full stop then in
the year 1987 maruti started exporting to the Hungary.the export word of small car
maruti 800. Maruti launched maruti 1000 in the year 1990. It was the India’s first
fashionable sedan. In the year 1933 maruti launch its new car that is maruti Zen. There
was a great demand for Zen. Later after success in India they exported to Europe. In
the 1994 maruti esteem was launched. This was the year the maruti produced its 1
millionth vehicle since the commencement of the production. Maruti has provided
vehicle services outlet throughout the country. In the year 1996 24 hour emergency
on-road vehicle services was launched. In just 3 years maruti was succeeded to
produce its 2 millionth vehicle. Later in 1999 maruti launch two cars that is one in
midsize segment WagonR and in the UV segment baleno. In the year 2000 maruti
launch its new car Alto and Alto. Alto is a luxury estate car .Auto become a great
30
success. Alto became India's new best selling car. In the year 2001 maruti launch
versa full stop for the year 2003 Grand Vitara was launched full stop recently in the
year 2005 maruti came with a new car Swift. Through all these years maruti was
launching its product as well as its different versions. It continued updating its car to
meet the consumer’s demand.
Why Maruti Suzuki
1. The Quality Advantage

Maruti Suzuki owners experience fewer problem with their vehicles than
any other car manufacturer in India. The customers now choose auto as number
one in the premium compact car segment and the steam in the entry level mid
size car segment and Wagner number one in the premium compact car segment
compared to others. The customers are satisfied with the card design content
layout performance.
2. A Buying Experience Like No Other

Maruti Suzuki has a sales network of 307 states of the art showroom
across 189 cities, with the workforce of over 6000 train sales personnel to guide
the customers in finding the right car.
3. Quality service across 1036 cities.

Maruti Suzuki customer have least problems experience with the vehicle
services, high service quality, best in service experience, best service delivery,
best service advisory experience most user friendly service and best in initiation
experience. 92% of Maruti Suzuki owners feel that work gets done right the first
time during service. 97% of Maruti Suzuki owners would probably recommend
the same make of vehicle, while 90% owners would probably repurchase the
same make of vehicle.
4. One Stop Shop

At Maruti Suzuki, the customer find all the car related needs made under
one roof. Whether it is easy finance, insurance, fleet management services and
exchange.
31
THE LOW COST MAINTENANCE ADVANTAGE:
The acquisition cost is unfortunately not the only cost customer face while
buying a car. Although a car maybe affordable to buy, it may not necessary be
affordable to maintain, as sum of its regularly used spare parts may be priced quite
steepy .not show in the case of Maruti Suzuki. It is in the economy segment that the
affordability of spares is most competitive, and it is here where Maruti Suzuki shines
Why do you need car insurance?

Having car insurance is a legal requirement and with the right level of cover,
provides financial protection in the event of your vehicle being damaged. It will also
provide cover for injuries to other drivers, passengers or pedestrians, and their
property. Accidents happen, so it’s reassuring to know that you’re covered financially
if you’re involved in one
Why is car insurance necessary?

Having car insurance is essential because it covers your expenses in the event
of vehicle damage or injuries to other drivers, passengers or pedestrians.
All motorists must be insured against their liability to other people, as
stipulated in the Road Traffic Act 1988.
Insurance can also provide financial support if your car is stolen, vandalised or
destroyed by fire.
There may be instances in which you don’t need to insure your vehicle, for
example, if you have declared your vehicle off the road through a Statutory Off Road
Notification (SORN) from the DVLA.
What if I’m not insured?

Driving without car insurance is illegal. If you don’t have it, you could be fined or
disqualified from driving.
The maximum fine is unlimited, plus you'll receive six to eight penalty points on
your licence.
The Government is currently reviewing penalties for uninsured drivers who kill or
are involved in accidents.
The police also have the power to seize and destroy any vehicle being driven
without cover.
32
Types of car insurance
There are three levels of cover you can choose from - third party; third party, fire and
theft; and comprehensive.
• Third party - This is the bare minimum required by law, but isn't always the
cheapest. It covers injuries to other people and damage to others property.
• Third party, fire and theft - This is the same as third party but also covers the
cost of repairs or a replacement vehicle if your car is stolen or damaged by fire.
• Comprehensive - This is the highest level of cover you can get. It protects against
damage to your own car as well as accidents involving other people. It can also
include a courtesy car and legal expenses insurance; however this may be at an
additional cost.
Your insurer may also allow you to add named drivers to your policy who can also
drive your car, but it’s important to remember that the main driver must be the person
who drives the car the most.
Learn more about the different types of Breakdown Cover that RAC also provide to
help keep you safe on the road.
How is the cost of car insurance worked out?

Your premium is based on a number of factors, including your age, where you
live, the type of car you drive, your occupation, where your car is kept, what you use it
for and whether you’ve been convicted of any motoring offences.
You can often lower your premium by paying a higher excess, which is the
amount you have to contribute towards the cost of a claim you make.
Young people in particular face high premiums because of the greater accident
risk they carry, and some may be tempted to cut corners to get a cheap deal.
However, the Insurance Fraud Enforcement Department (IFED) has warned
motorists to be on their guard against ‘ghost brokers’, who sell fake insurance.
They prey on those paying the highest premiums by offering cheap deals online,
by the roadside or in restaurants.
Always make sure your insurer is regulated by the Financial Conduct Authority.
33
No Claims Discount
For every year you don't make a claim on your car insurance, you'll earn a years
No Claims Discount (up to a maximum of 9 years). This No Claims Discount is then
translated into a discount at renewal, although a reduction in premium is not always
guaranteed should there be a change in your circumstances or the markets.
Often, this will remain intact if you make a claim for an accident that wasn’t your
fault. You must always notify your insurer of any accidents you’re involved in, even if
you don’t make a claim.
With RAC car insurance, you can get up to 65% off your premium if you haven’t
made a claim for more than nine years.
Specialist policies
Sometimes people's insurance needs are different, and if your car is particularly
unusual, you might need a specialist policy such as classic car or American classic car
insurance.
How to renew your Car Insurance?

Almost all insurance providers will send you a notification stating that your
policy is about to auto-renew each year. Even though the notification may tell you to
sit back and relax, and that your policy will be renewed without you having to do
anything, you could end up paying too much for cover that no longer meets your
requirements.
It’s always a good idea to look at what the rest of the market is offering before
you make any decision about your current provider, the level of cover they offer, or
the price you’ll pay for it.
So, if you’re asking yourself, ‘when and how should I renew my car
insurance?’ we’re here to help. It can be quite confusing to know whether to auto-
renew or not, but here are a few pointers that’ll help you on your way to the open road.
When do you get your car insurance renewal?

Typically, your current provider will notify you about three weeks before your
policy is about to run out. The majority of car insurance policies are purchased
annually, so you’ll need to think about updating your insurance every 12 months.
It is then up to you to decide whether to switch provider or stay on for another

34
year. Three weeks may not seem like a long time to shop around or renew your
existing policy, but the renewal process is fairly quick. One way to do it is to look on
comparison websites for quotes on car insurance, however its worth bearing in mind
that not all insurers appear on these sites and some insurers offer more competitive
deals if you go direct. Once you’ve successfully applied for a new policy, you can be
insured instantly with just a couple of clicks.
Excess :
An excess payment, also known as a deductible, is a fixed contribution that
must be paid each time a car is repaired with the charges billed to an automotive
insurance policy. Normally this payment is made directly to the accident repair
"garage" (the term "garage" refers to an establishment where vehicles are serviced and
repaired) when the owner collects the car. If one's car is declared to be a "write off" (or
"totaled"), then the insurance company will deduct the excess agreed on the policy
from the settlement payment it makes to the owner.
If the accident was the other driver's fault, and this fault is accepted by the
third party's insurer, then the vehicle owner may be able to reclaim the excess
payment from the other person's insurance company.
The excess itself can also be protected by a motor excess insurance

policy.[citation needed.
Compulsory excess
A compulsory excess is the minimum excess payment the insurer will accept
on the insurance policy. Minimum excesses vary according to the personal details,
driving record and the insurance company. For example, young or inexperienced
drivers and types of incident can incur additional compulsory excess charges.
Voluntary excess
To reduce the insurance premium, the insured party may offer to pay a higher
excess (deductible) than the compulsory excess demanded by the insurance company.
The voluntary excess is the extra amount, over and above the compulsory excess, that
is agreed to be paid in the event of a claim on the policy. As a bigger excess reduces
the financial risk carried by the insurer, the insurer is able to offer a significantly
lower premium.
35
Top 10 Automobile Insurance Companies in India:
Getting a Motor Insurance, unlike other forms of insurance, is not a choice but
a legal compulsion. It is mandatory to have a third-party motor insurance under Indian
Motor Act. But it is recommended by experts to get a comprehensive insurance for
your prized possession. A comprehensive plan covers a vehicle not only on the loss/
damage caused by you to a third party (driver/vehicle/property) but also loss /damage
caused to your vehicle by natural/man made calamities. To top it up, every insurer
offers a host of valuable add-ons on the basic plan to make the coverage even more
effective.
There are three types of Motor Insurance -
• Private Car Insurance

• Two Wheeler Insurance
• Commercial Car Insurance Policy or Vehicle Insurance
The public sector insurers have always enjoyed the customer’s preference over
private sector insurers. Though, the pattern is bending in favour of private insurers
since the last few years.
Overview of Top 5 Motor Insurance Companies:

Bajaj Allianz General Insurance Co. Ltd.
Among the private insurance players in Indian insurance domain, Bajaj

Allianz is one of the largest general insurance companies in the country. A large
number of industry experts reveal that Bajaj Allianz Auto Insurance leads all the auto
insurance players in terms of customer satisfaction, cashless claim settlement and
features rich policies. The brand is also widely recognized as one of the most
customer friendly insurance companies in India.
Why it is the best ?

• Doorstep surveyor facility
• 24X7 Towing assistance
• Online purchase on EMIs
• Instant SMS Updates on Claims
• Cashless settlement at 1500+ network garages
36
Tata AIG General Insurance Co. Ltd.
Tata AIG General Insurance was incepted in 2011. Even being a

comparatively younger company, TATA AIG managed to win over a major fraction
of motor insurance market owing to its robust channels of distribution and hassle-free
claims.
Last year, the brand bagged reputed awards for being the best employer and
deployment of mobile application in insurance.
• Free car pick up

• Warranty on repairs
• Cashless settlement at network garages
• Claim settlement in 7 days
• Unique add-ons
The Oriental Insurance Co. Ltd.
Owned by the Central Government, Oriental Insurance Company Limited is

one of the best companies to get a motor insurance. The brand boasts of winning the
most reputed awards in the industry. The latest ones worth mentioning here are - ‘best
public general insurance award’ and ‘best bank and financial institution award’.
Oriental is one of the few insurance companies in India to get the iAAA rating by
ICRA, indicating its strong financial framework.
• One of the most reliable names in motor insurance

• High claim settlement ratio
• Fast claim settlement Valuable add-ons The New India Assurance Co. Ltd.
New India is wholly owned by the government of India. Backed up by a strong

capital, infrastructure and human resource, auto insurance company in India. The
brand has embarked an international presence and is well known for being a pioneer
in introducing innovative insurance products.
37
• Claim decision taken within 3 days of application
• Surveyor appointed within 48 hours of claim intimation
• Claim payment made within 3 days of discharge voucher receipt
• Grievance acknowledged within 3 days of receipt
• Grievance resolved within 15 days of receipt
HDFC ERGO General Insurance Co. Ltd
Bolstered by a robust channel of distribution and customer oriented approach,

HDFC is the top notch brand for getting a motor insurance. HDFC boasts of having
one of the highest car insurance claim settlement ratios among private motor insurers.
HDFC ERGO is ISO 9001:2008 certified for its operations and claim processes and
has been rated iAAA by ICRA. It was recognized as the best general insurance
company in India by IAIR in 2013.
• Age and profession discount

• Zero documentation
• Fast claim settlement
• Cashless settlement at 1600+ network garages
ICICI Lombard GIC Ltd.
ICICI Lombard is one of the top private general insurance firms in India. A
brainchild of ICICI Bank, ICICI Lombard has a stronghold in the insurance market,
especially for car insurance. The company has sold more than 17 million policies so
far and has settled more than 2 million claims by the end of the last fiscal year. They
offer insurance products designed to meet the needs of customers from both urban and
rural population. They provide insurance solutions that cover personal, project and
business liabilities. ICICI Lombard Car Insurance covers the following:
• Loss or damage to your vehicle against natural calamities

• Loss or damage to your vehicle against man-made calamities
38
• Third Party Legal Liability
• Personal Accident Cover
ICICI Lombard also has a hassle-free claim settlement process.
Bajaj Allianz GIC Ltd.

Bajaj Allianz is a joint venture between Bajaj Finserv Ltd. and Allianz SE.
Bajaj Allianz commenced its operations in 2001 and has their offices located in over
200 cities and towns across India. The firm caters to the individual insurance needs of
consumers. They offer a number of insurance and have a large customer base in India.
They have built technologically advanced platforms like mobile and digital
applications to engage the public. The firm takes great pride in delivering high value
to their consumers. Their car insurance offers a number of benefits apart from the
basic car insurance coverage like:
• 24x7 Roadside Assistance facility

• 50% of No Claim Bonus (NCB) transfer from any other car insurer
• Extensive cashless garage network with over 4000 garages
• The option of availing car monitoring devices through their unique DriveSmart
Telematics Service
• Zero depreciation cover is offered as one of the rider options
Bajaj Allianz GIC Ltd.

Bajaj Allianz is a joint venture between Bajaj Finserv Ltd. and Allianz SE.
Bajaj Allianz commenced its operations in 2001 and has their offices located in over
200 cities and towns across India. The firm caters to the individual insurance needs of
consumers. They offer a number of insurance and have a large customer base in India.
They have built technologically advanced platforms like mobile and digital
applications to engage the public. The firm takes great pride in delivering high value
to their consumers. Their car insurance offers a number of benefits apart from the
basic car insurance coverage like:
• 24x7 Roadside Assistance facility
• 50% of No Claim Bonus (NCB) transfer from any other car insurer
• Extensive cashless garage network with over 4000 garages
• The option of availing car monitoring devices through their unique
39
DriveSmart Telematics Service
• Zero depreciation cover is offered as one of the rider options
The New India Assurance Co. Ltd.

The New India Assurance is a multinational general insurance firm that
operates in 28 countries with its head office in Mumbai. They are one of the oldest
general insurance firms in India and have been operating for more than 40 years. They
have a large customer base and operate from 2,452 offices including 1,339 micro
offices situated across India. They have 17,702 dedicated employees serving the
public with the best insurance solutions. The company has more than 230 insurance
products under its umbrella. The car insurance plans offered by the firm are
straightforward and cover all the general aspects of a motor insurance.
The Oriental Insurance Co. Ltd.

The Oriental Insurance Company commenced their operations in Mumbai in
September 1947. Being one of the pioneers in the insurance sector, the firm has a large
customer base. The firm is run by the Central Government of India. The insurance
products offered by this firm cater to the needs of both rural and urban population. It
has its head office in New Delhi with 31 regional offices and more than 1800 micro
offices situated across India. They offer insurance for private cars alone. The private
car package offers the general motor insurance benefits with four unique rider
options.
HDFC ERGO General Insurance Co. Ltd

HDFC ERGO is a general insurance firm and a joint venture between ERGO
International AG and HDFC Ltd. The firm offers a wide range of insurance products
like home insurance, motor insurance, travel insurance, etc. that cover both personal
and business insurance needs. The firm has an expanding network with 108 branch
offices situated across 91 cities in India. They have an employee base of 2000 who
serve the public with the best insurance schemes and offers.
Besides the employed sales force they have retailers, corporate agents and brokers
extending the firm’s services to the public. They have launched a mobile app that
helps in faster communication, making it easier for the public to reach them.
40
United India Insurance Co. Ltd.
United India Insurance started its operations in India in February 1938. The firm
has a stronghold in India with over 1300 offices across the country providing quality
insurance solutions. They have a large workforce of 18,300 employees. They are one
of the trusted insurance firms with a customer base of 1 Crore policyholders in India.
They also have micro offices situated at over 200 tier II and III villages and towns
serving the rural population too. Their car insurance scheme has the following key
features:
• Car insurance offered is of 2 kinds, package plan, and liability plan

• Hassle-free and easy documentation process
• A number of discounts along with No Claim Bonus are provided
National Insurance Company

A state-owned general insurance company, National insurance Company was
established in 1906, and was nationalised in 1972. Headquartered in Kolkata, National
Insurance Company deals with motor insurance, health insurance, personal insurance,
rural insurance, etc. Vehicle owners in the country can choose to buy a third-party
liability insurance policy or a comprehensive car insurance policy from National
Insurance Company. Listed below are the key features and benefits of car insurance
policies offered by National Insurance Company:
• Policyholders can buy or renew their third-party liability car insurance policy
online on the website of the insurer.
• Hassle-free claim settlement process.
• Round-the-clock customer care service.
• Choice between a third-party insurance policy and a comprehensive car
insurance policy.
• Compensation for the third-party up to Rs.7.5 lakh as per Insurance
Regulatory and Development Authority of India regulations.
41
Future General India Insurance
A private general insurer, Future Generals was established in 2007 following a

joint venture between Associations General and Future Group. In 2017, the insurer
recorded having more than 12 lakh customers and since their inception have settled
over 1.80 lakh claims. Present in over 125 locations across the country, Future General
has over 6,000 insurance agents and more than 2,000 corporate clients that they
actively service. In FY 2017-2018, the insurer reported gross written premiums
(GWP) amounting to Rs.1,842 crore, a 16% hike in the premiums
collected as compared to FY 2016-2017. In addition, in FY 2017-2018, the company

registered a solvency ratio of 172%. Future Generali India Insurance offers a plethora of
insurance products including car insurance products. Some of the key benefits of
availing a car insurance policy from Future Generali India Insurance are listed as
follows:
• Instant claim settlements.
• Round-the-clock customer support and regular policy renewal reminders.
• Claim finalization’s in just 7 days.
• 24/7 Towing assistance following an accident.
• Transfer of No Claim Bonus and premium discounts.
42
Motor vehicle insurance law in India
Motor vehicle insurance law in India is governed by the Motor Vehicles Act,
Insurance Act and aspects of insurance contracts governed by the Indian Contract Act,
Transfer of Property Act and a few others. Motor vehicle insurance is the insurance coverage
of the risk of third party arising out the use of motor vehicle and also for covering the risk of
damage caused to the vehicle. Taking insurance policy for coverage of certain risks are made
compulsory and coverage for other risks are optional at the instance of the owner.
Accordingly, motor vehicle insurance policies can be divided into two, namely, compulsory
insurance policy (Act policy) and comprehensive policy.
Act liability insuranc:

A motor vehicle in a public place is potentially a dangerous and lethal
instrument. Even when it is without its engine or without petrol, if it is moved down
on an incline, even unintentionally, it can cause considerable damage and human
injury. Hence, unlike other properties which may be insured or not at the option of the
owner, a motor vehicle is required by law to be insured in respect of the user's liability
for death, bodily injury or damage to property of third party. These kinds of insurance
contracts are based on indemnity and only cover the damage, and the whole insurance
amount is not given every time.
As sometimes the driver of the vehicle is often a person of small means and
injured person goes without adequate compensation, insurance of motor vehicle
covering the third party risk is made compulsory in India and the Motor Vehicles Act
provides that, vehicle should not be used in public place without having insurance
policy covering third party risks.Third party risk means risk covered for bodily injury,
death and damage of property of third party. Third party means any person except
owner or passenger in the private vehicle. So pillion rider of the motor cycle,
passengers in private cars, jeeps etc. are not third party. However, passengers in
public vehicle such as bus. contract carriage vehicle, taxi etc. are also third party and
hence covered by third party or statutory policy.
The occupants of private vehicles and pillion riders are not covered by the Act
policy. However, they can be covered by paying additional premium of insurance. If
additional premium is not paid to cover the risk of occupants of private vehicle and
pillion rider, insurance company will not be liable to compensate such victims.
43
STORY OF SUCCESSFUL AUTOMOBILE COMPANY IN INDIA
MARUTI SUZUKI
Motor vehicle insurer:
With the emergence of insurance company booms in India there has been
occurrence of bike insurance company as mushrooms. There are very few players
which has been identified by the Insurance Regulatory and Development Authority of
India.
Car Insurance Claim Process - A Step By Step Guide For Claims:-

Motor insurance is compulsory in India. It is one of the most purchased
insurance products. This is because a growing percentage of the Indian population is
buying their own vehicles these days. As a result, motor insurance claims have also
gone up. But many a time, the policyholders do not know exactly what they can do to
get their car insurance claim. If you too want to know about the procedures, take a
look at the claims processes explained below.
Car insurance claim for damages to your own car
1. First and foremost, as the policyholder, you will have to submit a duly filled in
claim form along with the requisite documents to the insurance company and
inform the insurance company before you send the car to the garage for any
repairs. The forms are available on the insurers’ websites as well as at their
offices.
2. The insurance company will send a surveyor to assess the damages. The
surveyor will prepare a report and pass it on to the insurer and you will also
receive a copy.
3. If the damage is severe and requires immediate attention, then the surveyor will
reach the spot of the accident at the earliest.
4. Based on the surveyor’s report, you can arrange for your car to be repaired.
5. After the work is completed, you will have to take the duly signed bills and
documents from the garage and submit them to surveyor, who in turn will send
it to the insurance company.
6. If all the documents are in place, the insurance provider will reimburse your
44
bills.
Remember that the insurance company will not reimburse your bills if you do
not submit them immediately after your car is released from the garage.
Motor insurance is compulsory in India. It is one of the most purchased insurance

products. This is because a growing percentage of the Indian population is buying their
own vehicles these days. As a result, motor insurance claims have also gone up. But many
a time, the policyholders do not know exactly what they can do to get their car insurance
claim. If you too want to know about the procedures, take a look at the claims processes
explained below.
Car insurance claim for damages to your own car
1. First and foremost, as the policyholder, you will have to submit a duly filled in
claim form along with the requisite documents to the insurance company and
inform the insurance company before you send the car to the garage for any
repairs. The forms are available on the insurers’ websites as well as at their
offices.
2. The insurance company will send a surveyor to assess the damages. The
surveyor will prepare a report and pass it on to the insurer and you will also
receive a copy.
3. If the damage is severe and requires immediate attention, then the surveyor
will reach the spot of the accident at the earliest.
4. Based on the surveyor’s report, you can arrange for your car to be repaired.
5. After the work is completed, you will have to take the duly signed bills and
documents from the garage and submit them to surveyor, who in turn will send
it to the insurance company.
6. If all the documents are in place, the insurance provider will reimburse your
bills.
7. Remember that the insurance company will not reimburse your bills if you do
not submit them immediately after your car is released from the garage. So
you cannot keep the small bills and hope to submit them at the end of the year.
45
Car insurance claim process for a third party claim
1. If a third party has sent you a legal notice asking for a claim, do not
communicate with the party before informing your insurance company. Also
remember not to make any financial commitments or out-of-court settlements
before speaking to your insurer first.
2. Submit a copy of the notice to your insurer.
3. You will also have to submit copies of the RC book of the car, the driving
licence and the FIR.
4. The insurer will verify the documents and assess the accident and if found
satisfactory, you will get a lawyer appointed by them.
5. If the court directs you to pay the damages to the third party thereafter, the
insurance company will directly pay the dues to the third party
Car insurance claim process for a stolen car
1. First of all, file a complaint with the police and lodge an FIR.
2. Submit a copy of the FIR to the insurance company.
3. Once you receive the final police report, make a copy of it and submit it to your
insurance provider.
4. The insurance company will assign an investigator. Cooperate with the
investigator.
5. Wait for the claim to be approved.
6. Once that is done, submit the RC book of your stolen car to the insurance
company. The name of the owner will then be changed to the in insurance
company. The name of the owner will then be changed to the insurer’s name.
7. Submit the duplicate keys of the car and also a subrogation letter. You will also
need to submit a notarized indemnity on a stamp paper.
8. Once all the formalities are completed, the insurance company will disburse the
claim.
It is very important to be well informed about the formalities related to making

a car insurance claim. Whether you need to make a small claim due to a minor
accident or a major claim due to the theft of your car, knowing the procedures will
make the job a lot simpler for you.
46
CHAPTER 2.
RESEARCH METHODOLOGY
The study conducted on vehicle insurance in India on the insurance policies of

vehicles like car. India’s insurance company is the leading company in the field of
insurance which provides better service to the policyholder of the company at the
offered able prize. the study describes about the policyholder’s knowledge regarding
about the various ka policies offered by the company. The General Insurance sector
are in transitional face from the regulated market to the open market due to the
opening of industries from private entities. In this market usually there is a tough
competition between existing companies and new insurance companies in the market
and in this situation only sexy the strongest company will survive. In general, the
insurance company has minority strategic Macro Environmental Forces (demographic,
economics, technological, political legal, social and cultural) and sustainable Micro
Atmosphere Factors like clients, competition, distributors, user, extra. That affects its
capability to earn profit.
Objectives of the study:-
• To understand the policyholder’s awareness towards motor vehicle insurance

policy.
• To identify the preference of motor vehicle insurance by policy holder.
• To study the various factors influencing customer choices for motor vehicle
insurance.
• To suggest any suitable changes for service improvement in India Insurance of
vehicles.
• To create awareness about the motor insurance regulation and rules of India.
• To identify the preference to describe the General Motor insurance business

scenario in India.
47
Sampling: -
Sampling is the process of selecting units (e.g., people, organizations) from

population on of interest so that by studying the sample we may fairly generalize our
results back to the population from which they were chosen. When taking a sample
from a larger population, it is important to consider how the sample will be drawn. To
get a representative sample, the sample must be drawn randomly and encompass the
entire population .Sampling is defined as a process used in statistical analysis in
which a predetermined number of observations will be taken from a larger population.
The methodology used o sample from a larger population will depend on the type of
analysis being performed but will include simple random sampling, systematic
sampling and observational sampling.
Foundation of Data: -
• Primary Data: -
In this method of questionnaire contains question related to the research that would
be asked to the respective respondent who a part of research study is concerned
with the request to answer the questions of the respective questionnaire and return
back to the researcher.
• Secondary Data:-
Data collected by the newspaper magazine journals by marketing and articles and
books secondary data is not much effective when compared to primary data but
gives information on a particular study any research start with secondary data.
Sample Design
Sample techniques Random Sampling
Sample Method Probability Sampling
Sample Unit Vehicle Insurance in India
Instrument Questionnaire
Sample Research Automotive industry in India
48
Scope of Study:-
The present research work will be of immense help to the Vehicle Insurance
Industry since not much work has been done in this area, and therefore, the research
work will try to open new gateway to study the role of Third Party Administrators
(TPAs) and their services, especially the claim-processing and settlement services
between the policyholders, insurance companies and the healthcare providers. With
the rapid change in technologies in this sector and growth of policyholders, the time
has arrived, that Insurance Regulatory and Development Authority (IRDA) issues
regular guidelines and regulations to the Third Party Administrators (TPAs) in order
to improve and enhance their services in the urban and rural areas as well.
The present research work will provide assistance for further studies to the
scholars, academic institutions and the Insurance Companies to analyze new insights
into the role and performance of Third Party Administrators (TPAs). It will be of
immense help to the vehicle insurance companies in perceiving the customer
satisfaction level towards the services provided by the sample TPAs and therefore
improving the customer services by inducing proper synchronization between
policyholders, TPAs and vehicle insurance companies. It will provide an understanding
to the policyholders to avail better services & facilities during the processing of their
vehicle insurance claims.
49
CHAPTER: -3
REVIEW OF LITERATURE
INTRODUCTION
The review of literature on the present study ”The study of Vehicle insurance in India
with special reference to car insurance in India" is classified into 17 Books. 13
Reports, and 10 Newspapers Articles etc. The literature shows author’s point of views
on the vehicle and car insurance norms in India. Authors of various books explain the
past and the present of the insurance industry in India with an eye on the global
changes. Then the concept and the definition of insurance, insurance contract and the
historical of motor vehicles act are also mentioned in systematic by various authors.
Certain books show the importance of coverage of UK and International Insurance
Markets and the impact of Globalisation, harmonisation. and convergence along with
the role of insurance within financial framework is explained in comprehensive
mechanism. The role competitive insurance market, regulatory approach reflects
different interest, liberal insurance market, market power, path towards competitive
solvent insurance market, and future role of government towards the Indian market is
critical analysed by various authors. The business policy of insurance in India, claims
procedures, sewage disposal, basic claims settlements, insurance risk management
and its procedures of insurance business in India was well explained by books
authors. The certain authors analysis on motor vehicles Acts in India 1988. claims
tribunals formation growth, compensations procedures, insurance of motor vehicles,
legal procedures evidence, appeals in courts relating towards legal aid. criminal law.
Lok Adalat cases and settlements etc issues in India.
50
The Literature review on books, reports, and newspaper articles for present
study is mentioned below :-
1. The Chartered Institute of bankers (London), "Insurance" 3" Edition

bankers book limited 1996 New Delhi. Book no: - 16481 (MA) The basic
understanding of the concept of risk, the development and the role of insurance
industry, various classes of insurance, types of provider and the legislative
environment all within the wider context of financial services is the issues of the
insurance industry is explained in details from the book. The scope and purpose
of insurance. the principles of the insurance contracts are essential terms
mentioned. The book provides coverage of UK and international Insurance
Markets and the impact of Globalisation, harmonisation. and Convergence is also
provided, the concept and role of insurance within financial framework is
explained in comprehensive mechanism. The unit team members of the
Chartered Institute of bankers (London), analyses the Basic Insurance concept.
Insurance marketplace. Government Policies. Private Car insurance. and the
financial services of U.K in the insurance business Industry. References are taken
from book for further studies on the issue of insurance risk transfer mechanism.
2. Swami Saran Sharma "Essential Insurance Guide for SMEs" Business

World Publications New Delhi 2007 Book is written by risk expert
management author who initiates the reader to the basics of risk management and
its relationship with insurance. The book provides a step by step guide to
managing insurance related issues, be it choosing the right insurer, making a
claim or renewing insurance policies. The book also offers a detailed listing of
insurance products. The analysis of small and medium enterprises (SMFs) is
more vulnerable to the impact of risks than large corporations since they neither
have professional risk managers nor financial resources to absorb losses. Study
also lack in awareness that insurance plays a pivotal role in crushing them from a
variety of insurable risks. Book was essential to understand the basic analysis of
insurance market for present study.
51
3. Mr. H. Narayanan, "Indian Insurance a Profile - Past and Present of Indian
Insurance Industry with focus on Global Changes, JAICO Publishing House
Mumbai 2010 The insurance industry in India has come a long way. within a
decade of India obtaining her independence, the makers of modern and
independent India decided to bring in the life insurance industry into mainstream
of national life to give a meaningful expression to the social aspiration of the
people of India, 'the book shows the effectiveness and substance on Life
Insurance Corporation and the General Insurance Corporation contributing to
redesigning the socio economic fabric of modern India as part of the post
independent economic history of India. Though these two organisations have
interlaced and intertwined their destiny with that of India, preference shift in the
Indian markets, new realities of the Global Economic order, and demands arising
out of multilateral trade agreements have all left India with no option other than
throwing open its economic and commercial policies to global competition and
challenges. In such circumstances the Insurance Industry of India could not
remain protected and insulated from facing new challenges. The global exposure
of the Indian Economy appears to have paved for the unprecedented economic
resurgence. Author ll.Narayanan tries to profile the past and the present of the
insurance industry in India with an eye on the global changes. The concept and
the definition of insurance, insurance contract, and the history of motor vehicles
act beginning were taken as reference study.
4. Gnanasundaram Krishnamurthy "Vehicle Insurance '' New Horizon Media

Private Ltd Oxygen of negligence. liability of insurance companies. Selection
of appropriate multiplier, etc. the Central Motor Vehicles Rules. 1989 has often
been amended for the implementations of provision of the act. . the updates
amendments included to make this compendium as a good reference book. The
basic definition of motor vehicles and the chart on types of vehicles, which is
concerned on the transport vehicles and non - transport vehicles were taken as
reference study.
52
5. DheerajRazdan "Insurance Principles, Application and Practices" Cyber
Tech Publication New Delhi 2008, Book no; - 20257 (NIA) The details of
history and origins of insurance business in the world are mentioned in the book.
The analysis of general insurance business operations and decision making are
given in comprehensive pattern. Book analyses the business policy of insurance
in India, claims procedures, salvage disposal. Basic claims settlements, insurance
risk management and its procedures of insurance business in India is mentioned
in the book. Operation of insurance business in India along with the governmental
procedures is also mentioned in detail. The financial procedures and policies are
given in detail format. The concept of history and origins of insurance is taken as a
reference for study.
6. M. N. Mishra "Insurance Principles and Practices” S. Chand / Company

Ltd. Nen Delhi 2005, Book no;- 18496 (MA) The book on Insurance Principles
and Practices is divided into five segments as the first segment is on Introduction
to the Insurance, second segment is on Life Insurance, third segment is on
Marine insurance, fourth segment is on Iirc Insurance, and fifth segment is on
Miscellaneous Insurance along with the prospects of insurance and privatisation
of insurance industry in India is mentioned in details. The certain parts of
reference from the book; on introduction of the term insurance are reviewed for
reference study.
7. B.S. Bodla, IVl C Garg "Insurance Fundamentals Environment and

Procedures" Deep / Deep Publications Pvt. Ltd. Nov Delhi. 2003, Book no;-
16993 (NIA) The book is an analysis of Insurance fundamentals, its working
environments and procedures. The book is divided into three major segments of
fundamentals, its working environments and its procedures lor the regular
insurance business. The book is a comprehensive analysis of operations in
principles of insurance. Insurance and economic deVelopment. business
environment. Growth of insurance business in India and business environment
along with insurance procedures. The book explains the procedures,
documentations of insurance business, settlements of claims. Life insurance and
non life insurance procedures. Certain parts of explanation on the introduction of
insurance as sum of money, premium and compensation are reviewed as the
53
reference study from this book.
8. Janak Raj JAl "Motor Accidents Claims and Procedures" Universal Law
Publishing Co Ltd New Delhi 2007, Book No;- 19736 (NIA) The book shows
the detail of Motor Vehicles Acts in India 1988. Claims Tribunals Formation
growth. Compensations Procedures. Insurance of Motor Vehicles. Legal
Procedures Evidence. Appeals in Courts Relating towards Legal Aid. Criminal
law. Lok Adalat cases and settlements etc. The reference from the book is taken
on the definition on Motor Car. Carriage Goods. Heavy Motor Vehicle and Light
Motor Vehicle, and Motor Vehicle Act difficulties in the beginning. Compulsory
Insurance. Lorem. Amendment of 1969. Insurance against Third Party Risk, and
the provision of third party insurance is compulsory is taken as the reference
study.
9. V.B. Kolhatkar, V.A. Pai "Motor Insurance" Insurance Institute of India

Mumbai 1999, Book no;- 1640 (NIA) Author's book is a detailed analysis about
the motor insurance. The history of Motor Insurance. Introduction about the
Motor Insurance in India, legal aspects regarding the rules and regulations on
motor insurance in India. Motor policies and its impact in India. Motor Tariffs.
Documentation process of motor insurance. Underwriting process of motor
insurance in India, and the claim procedures of motor insurance in India are
mentioned in the book. The history of motor insurance, types of motor vehicles,
and the Motor Vehicle Act 1988 (Act no 59 of 1988). The Act is effective from
1st July 1989 and is taken for reference study.
10. R.K. Gantra, "Motor Insurance '' 2010 l.C. Insurance Institute of India
Mumbai 2010, Book no;- 22361 (NIA) The book is a collection of various
forms and documentation of the motor insurance in India. The book is the
upgraded version on motor insurance introduction, legal aspects, motor insurance
policies, motor insurance practices, documents, underwriting, claims, motor third
party pool. Information Technology in motor insurance. The information about
vintage car and light motor vehicle weight and gross motor vehicle weight
analysis in the current motor insurance scenario was taken for the reference
study.
54
11. Mr. Kluwer "HandBook of Insurance" Hand book (Compiled folder), Book
no;6988 (NIA) It is the compiled set of folder book named "Handbook of
insurance " the book consists of various segments on the general principles and
the market of insurance. Property and business interruption of insurance,
engineering insurance, liability insurance, construction insurance and the issues
of motor insurance market, legislations and general principles, insurance of
private cars and motorcycles, insurance of commercial vehicles, motor trade and
contingent liability insurances. The Motor Vehicles (Compulsory Insurance)
regulations in 1992 come into force on 31''' Dec 1992 implement the third motor
insurance directive under which there is requirement for motor policies to cover
all passengers including those in the employment insured were taken as reference
study.
12. Sarkar "Motor Accidents, Insurance Claims and Compensation" 4"'

Edition Sodhi Publications New Delhi - Allahabad 2009 I'he book is a detailed
analysis of Motor Accidents, insurance Claims and Compensation. The detailed
analysis of claim procedure and the compensation process of insurance procedure
have been mentioned. The exhaustive coverage of supreme court decisions along
with cases on torts and negligence where the motor accidents claims through
tribunals rules and forms of applications is given in the book. The detailed
provisions of motor insurance, personal injuries and disability). The review and
revision process of claims tribunal courts is mentioned in the book. The Motor
Vehicles Rule Acts along with cases of certain states is given and the essential
aspects of insurance claims and compensations are extension explained in the
book was referred for the present study.
13. Sajid Ali, RaizMahamniod, Masharioue Ahmed "Insurance in India Regal

Publication New Delhi 2007, Book No;- 19538 (NIA) The book contains the
analysis of the insurance sector in India - ,4n overview Economic Liberalisation
and insurance sector reform in India. Development of insurance sector in India.
Risk Management in Insurance. Performance of insurance sector Pre and post
Liberalisation in India. Impact of Economic Liberalisation on the volume of
insurance business in India. The Book was used as references for the present
study where the performance of insurance companies, especially during the
insurance liberalisation of India was considered for the reference study.
55
14. The Institute of Chartered Accountants of India, "Motor Third Party Claim
Management" First Edition New Delhi 2009, Book no; - 20903 (NIA) The
Book is an analysis on General Principles of' Motor Insurance and Contracts,
proposal and policy forms, claim compensation, jurisdiction official courts, legal
provisions, legal aspects of third-party claims and roles and policies of Motor
accidents. References of current Supreme Court eases, liability of insurers and its
third-party claim management was essential factor for studying the insurance
business in Indian market. the basic understanding on motor claim management
as referred for the present study.
15. Confederation of Indian Industry Ernst & Young "Indian Insurance Sector-
Stepping into next Decade of Growth" Date - 1.9.2010 The report given by the
editorial team of Confederation of' Indian Ernst & Young provides extensive
information on Indian industry overview. Indian Industry)' on the crossroad of
development. Critical factors for market development and way forward for
Indian Insurance sector. The report is also an analysis of growth drivers,
financial inclusions. distribution channels, emerging trends, untapped latent
potential industry. recent regulator)' govern the current market state and
consumer preferences. The Indian Insurance market and Evolution of the
industry is taken as the reference study from the given report.
16. Report by United India Insurance CO. Ltd - "Private Car Package Policy ''
Date- 1.1.2002 The report is the analysis given by the United India Insurance
Company limited (GIC) government entity. on the Insurance Policy issued to the
customer for Car Insurance. The report that contains the entire procedure of car
insurance in India. The procedure mentioned in this report is followed by the
public and the private car insurance companies in India. The key components of
the car insurance is the procedure of loss or damage to the vehicle insured. Sum
insured declared Value (IDV). Liability to the Third Party. Personal Accident
cover for owner driver. General inspection (Applicable to all section of policy).
Terms and conditions of the motor insurance companies and the provisions of no
claim bonus. The analysis on car insurance policy, and its operations in India was
taken for the reference study.
56
17. Annual Report by Bajaj Allianz General Insurance Company Report
lO"'Year2009-10 The report is given by the Bajaj Allianz General Insurance
Company Limited is on the analysis of yearly performance of the company. The
certain parts of competitive environment core values of Bajaj general insurance
company on Customer First Always. Organisation above Self. Trust. High
Standards. Shared ownership. Spirit of Adventure, and Respect for Diversity was
taken for the reference study
18. Annual Report; Bajaj Allianz General Insurance Co. Ltd Report 11"'
(Policy Booklet) Date - 31.10.2011 Report on Baja) Allianz Central Insurance
Company Limited is on the analysis of yearly performance of the company. The
similar grounds analysis for car insurance policy operations measures in India are
shown in the report. The report file contains the similar car insurance policy
mechanism of loss or damage to the vehicle insured. Sum Insured Declared
Value (IDY). Liability to the Third Party. Personal. Accident cover for owner
driver. General Exception (Applicable to all sections of policy). terms and
conditions of the motor insurance companies and the provisions of no claim
bonus. Report was selected to show a similar kind of car insurance policy issued
by the private general insurance company. The reference on the No Claim
Bonus procedure, compulsory deductible, legal liability to paid driver or
conductor or cleaner employed in connection with the operation of insured
vehicle. and personal accident to an unnamed passenger other than insured and the
paid driver and cleaner procedure u as taken for the reference study.
19. Insurance Regulatory Development Authority l" Annual Report 2000-01,

IRDA Report Part - I, Date - 01.01.2002 Source; - www.irda.gov.in Report
is of any kind presented by IRDA. As the report gives the details about the
constitution of IRDA. Historical Background. Agents and insurers intermediaries,
surveyors and loss assessors, professional bodies, control and monitoring, self-
regulatory bodies, headquarters of the authority, policies and programmers,
review^ and working operations of insurance regulatory and development
authority. The statutory function of the authority ensured in section 14 of the
Insurance Regulatory and Development Authority Act 1999, and organisational
matters of Insurance Regulatory and Development Authority. 70 The
57
introduction of the Insurance Regulator) and Development Authority (IRDA).
Objective Statement of IRDA. Insurance (Amendment) Bill. 2001. insurance
Association and Insurance Council, functions of IRD.A. the statutory function of
the authority ensured in section 14 of the Insurance Regulator)- and Development
Authority) Act 1999. and organisational matters of insurance Regulatory and
Development. Authority were taken for the reference study.
20. Insurance Regulatory Development Authority 2"' Annual Report Year-2001

-02, Source; - www.irda.goA.in Report was given by Insurance Regulator)
Development Authority (IRDA) it's the annual report of the year 2001 -
2002 (2nd Annual Report). The report is on the basic regulations of aggregate
insurance business in India. The report is on the Constitution of the authority,
evolving market conditions. regulations, role of professional bodies, issues
penetrating to customer protections, issues pertaining to solvency). reporting
practices, issues pertaining to registrations of new insurers. surveyors and loss
assessors. Third party administrators. Tariff advisory committee. obligations of
life and non-life insurers. International co - operations, role of technology'.
Headquarters authority'. The introduction of Tariff Advisory Committee and the
table for list of existing tariff business control by Tariff Advisory Committee is
taken for the reference study. Carrying Vehicles, tariff for Trailers Tariff for
Vehicles used for Carrying Passengers for Hire or Reward. Tariff for
Miscellaneous. Special Type of Vehicles tariff for Motor trade. Road transit
Risks Tariff for Motor Trade. Road Risks Tariff for Motor Trade. Internal Risks
Proposal forms Standard Wordings in respect of Police including Premium
Computation Table and Certificate of Insurance. I've a tariff on Note. India
Motor Tariff (IMT) endorsements. Statistical Codes for tariff are mentioned in
report. The Indian Motor Tariff provisions introduction and the regulations for
tariff private car were taken for the reference study.
21. Insurance regulatory Development Authority 11" Annual Report "S ear -
2010 -11, Source; v.irda.gov.in Report b> Insurance Regulatory
Development Authority (IRr3.'\) is the annual report of the year 2010 - 2011
(I l"' Annual Report). The report is the analysis on the policies and
programmers on current Indian insurance market and various sectors of
58
insurances, review of working and operations of insurance business and
international co - operations in insurance business. public grievances. Insurance
associations and insurance councils, statutory and development functions of the
authority}'. and organisation matters relating to the insurance business are dealt
within, 'the application on Indian Motor Third Party' Insurance Pool (IMI PIP) is
taken as the reference study.
22. The Indian Express (Express Money Editions) - Amitabh Jain VP Customer
Service Motor ICICI Lombard, "You can save money on that Car
Insurance Policy" Date - 13/2/2012 The Indian Express, article was about
current claim procedures determinants and tips for lowering your car insurance
premiums. Article given in newspaper is taken for the reference study. The
details of article was on car insurance is the combination of own damage and
third party liability coverage. Own damage part of the insurance covers any
damages /theft (total or partial) oi' the car whereas third party covers any
damages and injury caused to a person and property by the insured car. The
primary factors that determine our car insurance premium are the make / model
of the car. age 72 of the car and city of registration on the basis of IDV Insured
Declared Value. The claim procedures are determined on the company package
policy. Tips on lowering \our car insurance Premium on the issues of no claim
Bonus. Discount for Ami Theft Devices. Automobile Association Membership
Discount and going online was mentioned in the article.
23. The Economic Times of India - Editors pane! (New Delhi) "India will be 3rd
Lar``iest Light Vehicles Market by 2020'' Date - 14/6/2011 The Economic
Times of India, article on the written under the panel of editors of Economic
Times on the future growth in vehicle industry is mentioned in this article was
basically about the predictions that ""India will be the 3rd Largest Light Vehicles
Market by 2020"" states that India will become the third largest market in the
world after China and I'S for light vehicles. including passenger cars and Light
Commercial Vehicles (LVC) b>' 2020. According to market research firm .ID
Power Asia Pacific, 'the country however. will ha\e to improve its infrastructure,
as well as resolve component supply chain issues, in order to realise its huge
potential. India will become the third biggest market for light vehicles that
includes passenger cars and LVCs. with total sales of neath' 12 million units. In a
59
report given by India Automotive (2020). By 2020. China's light vehicles market
is expected to reach 35 million units. while that of the US will rise to 17.4
million units. There is a huge potential in Indian market, but the key challenges
lie in infrastructure growth to support the automotive industry. India Automotive
report pointed out that the average income of Indians expected to be moderate
even in 2020; vehicles demand will still be focused in lower end passenger
vehicles segment as well as in Sports Utility Vehicles (SUV) and Multi Purpose
Vehicles (MPV) segments. The article was taken as a reference study.
24. The Economic Times of India - Editors Panel "Car sales rise just 7% to 1.58
L in May, Slowest in Two Years" Date - 10/06/2011 The Economic Times of
india. article on the car sales in the current scenario of the Indian market is
mentioned by the editors of economic times as the article was taken for present
reference study. The article mentions the car sales growth at their slowest pace in
two years in May. as rising fuel cost and costlier loans dampened demand. The
sales figures heightened fears that stubborn}' high inflation and aggressive rate
hikes by the Reserve Bank of India to tame it are crimping economic growth.
Sales rose just 7% to 1.58 lakh units during the month, as against .30"/» jump in
deliveries to 1.48 lakh units in the year ago period, data released by the Society
of Indian Automobile Manufacturers (SIAM). This trend is likely to continue for
some time, after which there will be pick up in sales hopeful)'. Demand for
vehicles in India, an important gauge of the country's economic health, is led by
a middle class that mostly bases its purchase decisions on the price of fuel and
loans. I've growth rate was down for cars, the growth in numbers was the seat
since Ma)' 2009 when car sales rose 2.77%. (SIAM) expects sales to drop to 12 -
% in the current financial year, after it surged 30% last >ear to 1.98 million units,
driven mainly b\' a demand from the growing middle class. Liberal economic
policies of the government of India have contributed significantly towards the car
market in India. Many foreign investors ha\e become interested in coming and
investing open handedly in the car market of India. Reduction in the rate of
customs for small vehicles has also supported a substantial boom in the Indian
automotive industry. It is expected that the car market in India is going to be one
of the biggest car markets in the world.
60
25. The Economic Times - Editors Panel of India "Car sales post slowest
Growth in 27 Months" Date - 12/07/2011 The Economic Times, article on
the car sales of 2011 is mentioned in detail. The article is about the Domestic
passenger car sales saw its growth in 27 months in June 2011 at 1.67%. The Car
sales stood at 1. 43.370 units in June 2011 this )ear against 1.4!.0- the Society}'
of Indian Automobile Manufacturing (SIAM). This article was taken for the
reference study on the present scenario of car industry sales in India.
26. The Times of India - Editors Panel of India ``Car sales in Positive Zones in
Feb" Date2/3/2012 The Times of India, article on "Car sales in Positive
Zones in Feb 2012"" is the article taken for reference stud)'. The article
mentions that car sales remained positive in Feb 2012 as people purchase
vehicles ahead of an expected duty hike in the budget. Car sales, that suffered
this fiscal on account of higher interest rates and sharp rise in petrol prices, have
been holding steady over the last two to three months as companies cleared
inventories through discount and special offers. Company executives and dealers
said a possible duty increase on diesel cars that can see their retail prices go up
and has led to customers to buy vehicles. Maruti March towards normally
continued as company volumes were up 6% at 1.07 lakh units in 2011. While
companies like Tata Motors, Hyundai, Mahindra, Toyota continued their healthy
run. The sales were not on expected lines as the market continued to be sluggish.
High interest rates, hike in fuel prices, commodity prices, inflation and negative
market sentiments continue to put a lot of pressure on the automobile market.
27. The Economic Times of India - Vidyalaxmi & Preeti Kiilkarni "5 Add - ons
Luxury Car Insurance must Have" Date - 7/09/2012 The economic Times,
article on "5 Add onsluxun Car Insurance must Have"" analysis on car
insurance covers have become high) comprehensive. offering a range of add -on
that are crucial, especially for the luxury cars. While ignoring comprehensive
insurance would be a mistake, resisting the urge to splurge on heavily - promoted
add - on is advisable. the article analysis add- on cover offered by car insurance
companies is Depreciation Reimbursement. Engine cover. Roadside .Assistance
Lost Key Replacement. Return of Invoice. filing a Claim. Certain parts of the
article were taken for the reference study.
61
28. The Economic Times of India - Preeti Kulkarni "No Pay a Lower Car
Insurance Premium if you are Married" Date - 16/01/2013 The lu'onoinie
Times, article on "Now Pa> a Lower Car Insurance Premium if you are
married"" was taken for the reference study. The article analw.es factors like
profession, gender and marital status, among many others, are now being used by
insurance companies to determine the premium. Traditionally, car premiums
were decided upon the basic factors like engine capacity, age of the car. and
geographical zones. Over the last four years insurers in India have started using
several other asset based parameters such as fuel used in the car. effective anti
theft device etc. Further few insurers now are trying with demographic
parameters as well. Now in terms of demographic parameters the companies
have started taking into account the insured age, gender, occupation driving
experiences. For instance, married individuals in the age group of 32- 60 are
entitled to discounts as they are perceived to be more responsible drivers as such
things are taken as a rating parameters. Discounts on the basis of such personal
information can go up to 20%. Likewise the loading on premium, can be high as
20% '' the possibility of discounts in one calegon being cancelled due to loading
in another cannot be ruled out. I'or instance, a high premium due to the fuel t\ype
max nullifies the discount earned on the account ol"occupational age. The Article
also states the ad\antages of certain discount factors like providing more
information in the proposal form: Buy Police online. protecting individuals No
Claim Bonus. Higher Deductibles. Choosing of Fuel Type '. and. Installing Anti -
Theft Devices.
29. The Economic Times of India - Ketan Thakkar & Bakul Chugan Tongia
"Petrol Vs Diesel Cars: V.cX your Fuel .Math right First'' Date-07/01/2013
The Economic Times, article on "Petrol Vs Diesel Cars: Ceet your Fuel Math
right First" the article analyses’ fuel price differential may tilt customer's
preference towards petrol cars. Since the hike in diesel prices the industry experts
the momentum for petrol cars to gather speed. Since then analysts say thanks to
hard - sell by auto companies to its dealers, the customers are now more
informed about which fuel powered car to choose depending on usage. The article
analyses’ petrol and diesel cars price rates of premium, usage measures, and
constant fluctuation on government price rates on petrol and diesel. The article
62
was taken for reference study.
30. The Times of India - Udit Prassana Mukerji "Third Party Motor Cover
Cost to Soar'' Date - 19/02/2013 The Times of huha, article on "Third Party
Motor cover cost to soar" was taken for the reference study, the analysis shows
that Insurance Regulatory Development Authority (IRDA) has recently proposed
a 38.87% weighted jump in Tl' motor insurance for private cars across all
subclasses in the exposure draft for revision of premium. The revision will hit
owners of entry level cars below look segments- the most as rise in TP cover
proposed for this category is 85%. The point of view from ICTCT Lombard.
Oriental and National Insurance companies are taken in the article to increase the
TP motor rates more due to high loss ratio in third parties.
63
64
65
CHAPTER 4:-
DATA ANALYSIS, INTERPRETATION & PRESENTATION
The Data Analysis Interpretation and presentation is done by questionnaire method for
my project automobile insurance in India:-
Questionnaire Method:-
The following questionnaire is to get overall measure of the attitudes and opinion of the
customer towards the Automobile insurance in India.
GENDER NO. OF RESPONDENTS PERCENTAGE
Male 5 11.1%
Female 40 88.9%
Prefer not to say 0 0
INTERPRETATION:
In the above pie diagram , the gender ratio of female is more than the ratio of male .
The male respondents are 5 which is less than the female respondents which is 40.
66
EMPLOYEE STATUS NO. OF RESPONDENTS PERCENTAGE
Students 34 75.6%
Business 3 6.67%
Employed 7 15.6%
Housewife 1 2.22%
INTERPRETATION:
In the above pie diagram the students, business, employed, housewife are considered.
In the above pie diagram the respondents of student are 34 and the respondents of
business are 3 where as the employed respondents are 7 and the respondents of
housewife is 1.
67
BRAND NO. OF RESPONDENTS PERCENTAGE
Ford 13 29.3%
Chevrolet 6 13.6%
Maruti 7 15.95%
Honda 12 27.3%
Other 7 15.95%
INTERPRETATION:
In the above pie diagram the brand of the vehicle is taken into consideration. In the pie
diagram chart many brands are taken into consideration that are Ford , Chevrolet,
Honda motor company, maruti, Audi Volkswagen group. The highest respondents is
of ford motor company which is 13, and 6 respondents have Chevrolet , and 7
respondent have maruti whereas 12 respondents have Honda 7 respondents have other
brands of motor vehicles.
68
YEAR NO. OF RESPONDENTS PERCENTAGE
2019 6 13.6%
2018 7 15.9%
2017 9 20.5%
2016 20 45.5%
INTERPRETATION:
In The above mentioned diagram the year of manufacture of a car is considered. The
year 2016, 2017, 2018 and 2019, are taken into consideration and the highest
manufacture of a car is 20 in the year 2016 and the lowest manufacture of a car is 6
which is in the year 2019 . And the above pie diagram also shows that in the year 2017
the manufacture of car is 9 and in the year 2018 the manufacture of a car is 7.
69
YEAR NO. OF RESPONDENTS PERCENTAGE
Less then oneyear 6 13.3%
More than one year 19 42.2%
More than three years 15 33.3%
More than five years 5 11.1%
INTERPRETATION:
In the research the respondents were asked that how many has been over for the
purchase of car. Out 45 respondents 19 respondents says it is more than one year, 15
respondents says it is more than three years, 6 respondents says less than year and 5
respondents says more than 5 years.
70
NO. OF VEHICELS NO. OF RESPONDENTS PERCENTAGE
1 30 66.7%
2 9 20%
3 6 8.9%
INTERPRETATION:
In the above mentioned pie diagram there are 30 respondents of one vehicle as the
highest and 6 has lowest respondents of vehicle.
71
LOAN NO. OF RESPONDENTS PERCENTAGE
YES 36 20%
NO 9 80%
INTERPRETATION:
In the research the number of people having loan on their vehicle is 36 respondents
whereas 9 of the respondents doesn't have loan on their vehicles.
72
PURPOSE NO. OF RESPODENTS PERCENTAGE
Personal 38 84.4%
Official 6 13.3%
None 1 2.3%
INTERPRETATION:
In the research the respondents were asked for what purpose they use car. So, 38
respondent use car for personal use and 6 use for official use 1 respondent does not
use for any purpose.
73
REPAIR NO. OF RESPONDENTS PERCENTAGE
Yes 31 68.9%
No 8 17.8%
Maybe 6 13.3%
INTERPRETATION:
In the research, the respondents were asked ever they get repaired their car in the past.
So, 31 respondent were repaired whereas 8 not repaired their car and 6 respondents
are not they ever repaired their car or not.
74
REASON NO. OF RESPONDENTS PERCENTAGE
Accident 21 54.1%
Mechanical breakdown 16 45.9%
INTERPRETATION:
In the above pie diagram chart , 21 of the people got repaired there car through accident
whereas because of mechanical breakdown 16 of people got repaired their car .
Therefore the reason for getting repaired their car is mostly accident.
75
HAPPY NO. OF RESPONDENT PERRCENTAGE
Yes 43 95.6%
No 2 4.4%
INTERPRETATION:
In the research the respondents were whether they are happy with services given by the
insurance company. So, 43 of respondents are happy and 2 of respondents are not
happy.
76
COMPANY N0. OF RESPONDENTS PERCENTAGE
Bajaj Allianz
general insurance 27 61.4%
co. Ltd
Tata AIG General

9 20.5%
insurance Ltd.
The oriented insurance Ltd 6 13.6%
ICICI prudential 1 2.27%
INTERPRETATION:
In the research 27 respondents is the highest insurance company of the car which is
insured with it is of Bajaj Allianz General Insurance cooperative limited where as the
lowest number is of ICICI Prudential is 1 respondent and 9 respondent of Tata AIG
general insurance Company limited has an average amount of car insured with and the
lowest 6 respondents percent it is of oriented Insurance Company limited.
77
CHAPTER 5: -
FINDINGS, SUGGESTION AND CONCLUSION
FINDINGS
1. In the research, the gender ratio of female is more than the ratio of male. The
gender ratio of male is 11.1% which is less than the ratio of female that is
87.5%.
2. In the research students, business, employed, housewife are considered. In the
above pie diagram the respondents of student are 75.6% and the respondents of
business are 6.67% where as the employed respondents are 15.6% and the
respondents of housewife are 2.22%.
3. In the research the brand of the vehicle is taken into consideration. In the pie
diagram chart many brands are taken into consideration that are Ford ,
Chevrolet, Honda motor company, maruti, Audi Volkswagen group. The
highest percentage is of ford motor company which is 29.5%, and 13.6% that
is of Chevrolet , and the maruti company is 15.9% percent whereas 27.3%
percent is of Honda.
4. In the research, the year of manufacture of a car is considered. The year 2016,
2017, 2018 and 2019, are taken into consideration and the highest percentage
of manufacture of a car is 45.5% in the year 2016 and the lowest percentage of
manufacture of a car is 13.6% which is in the year 2019 . And the above pie
diagram also shows that in the year 2017 the percentage of manufacture is
20.5% and in the year 2018 the percentage of manufacture of a car is 15.9%
5. In the research the respondents were asked that how many has been over for the
purchase of car. Out 45 respondents 42.2% of respondents says it is more than
one year, 33.3% of respondents says it is more than three years, 13.3% of
respondents says less than year and 11.1% of respondents says more than 5
years.
6. In the above mentioned pie daigram there are 66.7% of one vehicle as the
highest and 3 has the lowest percentage is of 8.9% .
78
7. In the research the number of people having loan on their vehicle is 20%
whereas 80% of the people doesn't have loan on their vehicles. Therefore 80% is
the highest that means more population does not have a loan on vehicle
8. In the research the respondents were asked for what purpose they use car. So,
84.4% respondent use car for personal use and 13.3% use for official use 2.3%
respondent does not use for any purpose.
9. In the research, the respondents were asked ever they get repaired their car in
the past. So, 68.9% respondent were repaired whereas 17.8% not repaired their
car and 13.3% respondents are not they ever repaired their car or not.
10. In the research, 54.1 % of the people got repaired there car through accident
whereas because of mechanical breakdown 45.9% of people got repaired their
car . Therefore the reason for getting repaired their car is mostly accident.
11. In the research the respondents were whether they are happy with services
given by the insurance company. So, 95.6% of respondents are happy and4.4%
of respondents are not happy.
12. In the research 61.4 percent is the highest insurance company of the car which
is insured with it is of Bajaj Allianz General Insurance cooperative limited
where as the lowest number is of ICICI Prudential and 2.27 percent of Tata
AIG general insurance Company limited has an average amount of car insured
with and the lowest 13.6 percent it is of oriented Insurance Company limited.
79
SUGGESTION
Following is the suggestions to consider before taking Car Insurance
How-to-buy-car-insurance
Buying the right car insurance for your new car can be a tricky situation, if you are
unaware about how to make the right choice. Accordingto the Indian Motors Act, it is
compulsory for automobile buyers to insure their vehicle during purchase. So what
should you keep in mind when looking for an ideal policy for the newly purchased
vehicle? Here is all that you should know.
Tips to Get the Perfect Car Insurance:
Below-given are things to consider when purchasing an automobile insurance.
Compare Before You Buy
Do not settle for the very first option of a car insurance online, but compare before
selecting one. Check out the top providers in your area. Who gives a better service?
Take feedback from existing customers in the neighbourhood about an insurer. You
can compare policies on the basis of coverage, inclusions, exclusions, premium
amount, limitations, add-on facilities, optional covers, etc, and choose the one that
suits your budget and needs.
Know About the Third-Party Insurance
The primary beneficiary of the policy is the possible outsider member who can get
affected by the action of the vehicle owner or the vehicle. The cover extends to legal
liability and other financial assistance. It provides cover for damages to third-party’s
property, accident, death, bodily injury, total permanent disability, etc.
Exclusions include claims from contractual liability in case a person other than the
owner or specified driver was driving the vehicle, accidental damage/liability/loss
outside geographical boundaries than what is specified, liabilities because of warlike
operations, nuclear weapons, radioactive contamination, and likes.
The claim is directly paid to the third-party. Involvement of a lawyer is required. Do
80
remember, insurance premiums will not differ as per the car’s value as it is impossible
to understand the possible liability.
Compulsory and Voluntary Deductibles
You have to bear a minimum amount on every claim. This amount you pay is the
compulsory deductible. The amount starts from Rs. 500 for a four-wheeler as per the
IRDAI rules. You can be charged a higher deductible for an older car with a higher
claim-risk. The company can even charge a higher deductible on a car policy for
vehicles with bigger cubic capacities or in scenarios when the risk of claim is
perceived as huge.
Voluntary deductible is the one that you decide to pay on your own. You can increase
this amount and lower the premium amount. Do note that compulsory deductible
unlike voluntary deductible, does not have an effect on the premium amount.
Claim Settlement
You should choose a provider who has a high claim settlement ratio. Claim settlement
ratio is calculated as: number of settle claims / number of claims reported + remaining
claims at the year’s start – remaining claims at the end of year.
Personal Accident Cover
When looking for car insurance, check for a personal accident cover. It will cover
expenses related to you as owner of the vehicle. It can protect against severe financial
contingencies due to accidental death from a mishap, accidental dismemberment of
limbs, accidental total or partial disability, reimbursement for hospitalization, injuries
or death caused due to act of terrorism, etc.
Insured Declared Value of the Ca
IDV of a vehicle is the maximum amount you can claim under the policy. This
amount is what you can get if your car is stolen or is totally damaged. After
subtracting the car’s depreciation value from its selling price as listed by the
manufacturer, you arrive at the IDV. Insurance and registration cost are not involved
in this calculation.
81
In-Network Garages
Check for the proximity and number of garages in your location when considering a
car insurance online company. The greater the network garages closes to your
location, the better will be the speed of immediate service required. Ask around your
location for the best insurer with high number of in-network garages, to make the
right choice.
Know About No Claim Bonus
NCB or No Claim Bonus is an additional discount you get on premiums, if you have
not raised a claim for the duration of a year. You are eligible for 5% to 10% of the
IDV as bonus on renewing of policies, in such a scenario. This bonus is up to 50% at
the maximum.
Other Facilities
Choose a car policy from a provider who gives a cashless option. During emergencies
it saves you from the hassles of having to run around arranging cash. Take into
account the time taken to issue the policy. Look for customer service and helpline and
check if the service is active. In dire situations, you will require the insurer to help
you instantly. Thus, quick availability of the provider on communication channels is
an important factor to keep in mind when choosing a provider.
To Conclude:
Out of the several things to consider when buying car insurance, we have mentioned
the ones that you should really not avoid. It is always better to take a comprehensive
cover along with the mandatory third-party liability policy, so stay better protected.
To reduce risks, you can even include a few optional covers such as that for personal
accident.
82
CONCLUSION
During recent years in India there is a boom in the automobile sector with high growth
rate and multinational companies are also findings huge business in the automobile
sector in our country. But as an adverse effect, the motor traffic increases in our roads
and the number of motor accidents are also increasing. So, the need and desirability of
the motor vehicle insurance has increased many times. Motor vehicle insurance is
obligatory for all types of vehicles new or old, used for commercial or for personal
purposes.
In India motor vehicle insurance policy is necessary for all motor vehicle owners as it
shields them from legal liabilities that might occur during their vehicle maneuver. In
our country motor vehicle insurance governed and works under the preview of Motor
Vehicle Act 1988.
For the purpose of the research three objectives were framed and efforts are made to
fulfill the objectives. First objective was achieved by studying the problems of motor
insurance in India from customers and company side separately. Second objective was
to measure the satisfaction level of motor insurance customers this was achieved by
analyzing the satisfaction level on 5 Likert scale on ten parameters and in that it was
found that satisfaction level of public sector company customers were more as
compared to private sector company customers, and the last objective was achieved
by suggesting measures for improvements and identify prospects for the companies.
On the basis of the analysis it is concluded that to enhance the performance regarding
motor insurance products, the companies should make them (policyholders) aware
about benefits of motor insurance Private sector should attain trust of policyholders
and improve their image in the minds of policyholders by giving benefits with
reasonable premium rates. IRDA should also formulate promotional strategies and
modified regulations in order to motivate these companies for increasing penetration
motor insurance.
To reap the full benefits of the enlarging potential of motor insurance portfolio, the
insurers have to tread new areas. Today customers are well equipped with
information, so insurance company should reposition different products by changing
customer attitudes.
There have to be bold initiative by the industry to meet the new needs of the motor
83
insurance market and convert the opportunities to its advantages. The future prospects
of motor insurance is very bright due to continuous increasing demand of motor
insurance, its portfolio is increasing day by day and various opportunities are there in
motor insurance. To be successful, a company must have quality people, innovative
management, right products and proper distribution channels.
The present research ―A Study of Problems and Prospects of Motor Insurance in
India with special reference to Public and Private Sector Companies‖ focused on
various problems of motor insurance and in that researcher made an attempt to analyze
and compare the satisfaction level of policyholders of motor insurance companies on
five likert scale on the basis of ten parameters and try to suggest measures for
improvement. The future study can be conducted on marketing strategies of Indian
motor insurance industry with special reference to rural area and further it can be
conducted on comparative study of Indian motor insurance industry with foreign
motor insurance industry. The growth of motor insurance is increasing rapidly,
various opportunities are available and future of motor insurance is bright.
84
BIBLOGRAPHY
1. The Chartered Institute of bankers (London), "Insurance" 3" Edition bankers
book limited 1996 New Delhi. Book no: - 16481 (MA)
2. Swami Saran Sharma "Essential Insurance Guide for SMEs" Business World
Publications New Delhi 2007
3. Mr. H. Narayanan, "Indian Insurance a Profile - Past and Present of Indian
Insurance Industry with focus on Global Changes, JAICO Publishing House
Mumbai 2010
4. Gnanasundaram Krishnamurthy "Vehicle Insurance '' New Horizon Media
Private Ltd Oxygen of negligence. liability of insurance companies.
5. DheerajRazdan "Insurance Principles, Application and Practices" Cyber Tech
Publication New Delhi 2008, Book no; - 20257 (NIA)
6. M. N. Mishra "Insurance Principles and Practices” S. Chand / Company Ltd.
Nen Delhi 2005, Book no;- 18496 (MA)
7. B.S. Bodla, IVl C Garg "Insurance Fundamentals Environment and Procedures"
Deep / Deep Publications Pvt. Ltd. Nov Delhi. 2003, Book no;- 16993 (NIA)
8. Janak Raj JAl "Motor Accidents Claims and Procedures" Universal Law
Publishing Co Ltd New Delhi 2007, Book No;- 19736 (NIA)
9. V.B. Kolhatkar, V.A. Pai "Motor Insurance" Insurance Institute of India
Mumbai 1999, Book no;- 1640 (NIA)
10. R.K. Gantra, "Motor Insurance '' 2010 l.C. Insurance Institute of India
Mumbai 2010, Book no;- 22361 (NIA)
11. Mr. Kluwer "HandBook of Insurance" Hand book (Compiled folder), Book
no;6988 (NIA)
12. Sarkar "Motor Accidents, Insurance Claims and Compensation" 4"' Edition
Sodhi Publications New Delhi - Allahabad 2009
13. Sajid Ali, RaizMahamniod, Masharioue Ahmed "Insurance in India Regal
Publication New Delhi 2007, Book No;- 19538 (NIA)
14. The Institute of Chartered Accountants of India, "Motor Third Party Claim
Management" First Edition New Delhi 2009, Book no; - 20903 (NIA)
15. Confederation of Indian Industry Ernst & Young "Indian Insurance Sector-
Stepping into next Decade of Growth" Date - 1.9.2010
16. Report by United India Insurance CO. Ltd - "Private Car Package Policy ''
Date- 1.1.2002
17. Annual Report by Bajaj Allianz General Insurance Company Report
lO"'Year2009-10
18. Annual Report; Bajaj Allianz General Insurance Co. Ltd Report 11"' (Policy
Booklet) Date - 31.10.2011 Report on Baja)
19. Insurance Regulatory Development Authority l" Annual Report 2000-01,
IRDA Report Part - I, Date - 01.01.2002 Source; - www.irda.gov.in Report is
of any kind presented by IRDA.
20. Insurance Regulatory Development Authority 2"' Annual Report Year-2001 -
02, Source; - www.irda.goA.in Report was given by Insurance Regulator)
Development Authority (IRDA) it's the annual report of the year 2001 - 2002
(2nd Annual Report).
21. Insurance regulatory Development Authority 11" Annual Report "S ear - 2010
-11, Source; v.irda.gov.in Report b> Insurance Regulatory Development
Authority (IRr3.'\) is the annual report of the year 2010 - 2011 (I l"' Annual
Report).
22. The Indian Express (Express Money Editions) - Amitabh Jain VP Customer
Service Motor ICICI Lombard, "You can save money on that Car Insurance
Policy" Date - 13/2/2012
23. The Economic Times of India - Editors pane! (New Delhi) "India will be 3rd
Lar``iest Light Vehicles Market by 2020'' Date - 14/6/2011
24. The Economic Times of India - Editors Panel "Car sales rise just 7% to 1.58 L
in May, Slowest in Two Years" Date - 10/06/2011
25. The Economic Times - Editors Panel of India "Car sales post slowest Growth
in 27 Months" Date - 12/07/2011 The Economic Times, article on the car sales
of 2011 is mentioned in detail.
26. The Times of India - Editors Panel of India ``Car sales in Positive Zones in
Feb" Date2/3/2012 The Times of India, article on "Car sales in Positive Zones
in Feb 2012"" is the article taken for reference stud)'.
27. The Economic Times of India - Vidyalaxmi & Preeti Kiilkarni "5 Add - ons
Luxury Car Insurance must Have" Date - 7/09/2012 The economic Times,
article on "5 Add onsluxun Car Insurance must Have".
28. The Economic Times of India - Preeti Kulkarni "No Pay a Lower Car
Insurance Premium if you are Married" Date - 16/01/2013 The lu'onoinie
Times,
29. The Economic Times of India - Ketan Thakkar & Bakul Chugan Tongia
"Petrol Vs Diesel Cars: V.cX your Fuel .Math right First'' Date-07/01/2013
30. The Times of India - Udit Prassana Mukerji "Third Party Motor Cover Cost to
Soar'' Date - 19/02/2013 The Times of huha, article on "Third Party Motor
cover cost to soar".

Final Project PDF

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Final Project PDF

Uploaded by

Copyright:

Available Formats

A PROJECT REPORT ON

AUTOMOBILE INSURANCE IN INDIA

UNIVERSITY OF MUMBAI FOR PARTIAL COMPLETION THE DEGREE

MISS. NEHA RAVINDRA SRIVASTAV

UNDER THE GUIDENCE OF:

Prof. Seema Attarde

PARLE TILAK VIDAYALAYA ASSOCIATIONS

MULUND COLLEGE OF COMMERCE

S.N. ROAD, MULUND (WEST) MUMBAI - 400080

ACADEMIC YEAR: MARCH 2020

AUTOMOBILE INSURANCE IN INDIA

UNIVERSITY OF MUMBAI FOR PARTIAL COMPLETION THE DEGREE

MISS. NEHA RAVINDRA SRIVASTAV

UNDER THE GUIDENCE OF:

Prof. Seema Attarde

PARLE TILAK VIDAYALAYA ASSOCIATIONS

MULUND COLLEGE OF COMMERCE

S.N. ROAD, MULUND (WEST) MUMBAI - 400080

ACADEMIC YEAR: MARCH 2020

Neha Ravindra Srivastav

Prof. Seema Attarde.

I would like to express my sincere gratitude towards my project guide Professor

CAHPTER NO. TITLE PAGE NO.

Insurance is a contract, represented by a policy, in which an individual or

Understanding How Insurance Works

There is a multitude of different types of insurance policies available, and

Businesses require special types of insurance policies that insure against

• Crime insurance is a form of casualty insurance that covers the policyholder

Annuities provide a stream of payments and are generally classified as

Certain life insurance contracts accumulate cash values, which may be

Motorized vehicle consisting of four wheels and powered by an internal

More popularly known as motor insurance, this type of insurance provides

A compulsory car insurance scheme was first introduced in the United

The legal mandate demanding the purchase of a third-party liability insurance

Breaking Down Auto Insurance

Auto insurance premiums vary depending on age, gender, years of driving

• Property – damage to or theft of your car

Many states also require:

• Medical payments or personal injury protection (PIP) – Provides

Motor insurance coverage

1. Basis of Sum Insured

2. Insured’s Declared Value (IDV)

3. Type of Motor Insurance

4. Period of Motor Insurance Policy

Cover Notes insuring Motor Vehicles are to be issued only in Form 52 in

6. Determining the rate of premium

Claims and wrong claims

In case of accidental damage to the vehicle, in case of theft of the vehicle, in

Dos and Don'ts for Motor Insurance

1. To create awareness of the availability of automobile insurance.

Car Insurance Benefits Why to Buy Car Insurance?

The answer is simple. Car Insurance is mandatory by law. Driving around

• Provides benefits to survivors when an accident results in death.

• Assured for financial liability

• Assured of repairs and replacement

• Assured for medical claims

• Protects driver and passenger liability

• Opt for cashless claim settlement for hassle-free claim settlement.

How To Choose The Right Motor Insurance Coverage?

Third-party liability insurance –

• Theft of the insured vehicle

2. Third-party liability cover - This part of the comprehensive motor insurance

In conclusion, motor insurance in India can be of several types. It is up to you